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Rupee Weakens Amidst Dollar Strength
13 Feb
Summary
- Rupee closed 3 paise lower at 90.64 against the US dollar.
- A firm dollar limited emerging market currency gains.
- New CPI series launched, tracking retail inflation at 2.75%.
The Indian rupee experienced a slight weakening, closing 3 paise lower at 90.64 against the US dollar on Friday. Forex traders noted that the rupee traded in a narrow band, influenced by a strengthening US dollar and a cautious sentiment in domestic equities. The rupee's movement mirrored the performance of other emerging market currencies facing pressure from the firm greenback.
In parallel, India launched a new series for its Consumer Price Index (CPI), with the January data indicating retail inflation at 2.75 percent. This updated series aims to provide a more accurate reflection of inflation by including a broader range of goods and services and reallocating weightages based on contemporary spending patterns. This data is crucial for monetary and fiscal policy decisions.
Market sentiment was also affected by renewed concerns regarding the disruptive potential of artificial intelligence across various industries, leading to a rally in safe-haven assets. The dollar index saw a slight increase, while Brent crude oil prices experienced a minor dip. Foreign institutional investors were net buyers of Indian equities on Thursday, purchasing stocks worth ₹108.42 crore.
