The news is by your side.

Rupee closes 2021 at 74.29, declines by 1.67% in year

The rupee rose by 13 paise to close at 74.29 against the U.S. dollar on the last trading session of 2021, tracking positive domestic equities amid year-end dollar selling by banks and exporters.

The rupee, however, closed the 2021 year with overall losses of 122 paise or 1.67% due to a rise in crude oil prices and firming up U.S. bond yields amid expectations of rate hike by the U.S. Federal Reserve to rein in inflation. The rupee had closed at 73.07 on December 31, 2020.

The local unit on the last trading day of 2021 opened at 74.35 against the greenback at the interbank foreign exchange market and witnessed an intra-day high of 74.10 and a low of 74.38. It finally settled at 74.29, a rise of 13 paise.

In the previous session, the rupee surged 29 paise to close at a more than one-month high of 74.42 against the U.S. dollar. On a weekly basis, however, the domestic unit registered a gain of 74 paise. This is the second consecutive week of gain for the local unit. The rupee has also registered the first monthly gain in four months.

Traders said the rupee is trading in a narrow range as market participants remained on the sidelines following New Year holidays.

Forex traders are keenly waiting for cues from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+ meeting outcome in the first week of January 2022.

“Rupee outperformed among Asian currencies this week following weaker dollar index and recovery in risk-on sentiments,” said Dilip Parmar- Research Analyst, HDFC Securities.

Mr. Parmar further noted that the local currency registered second consecutive weekly gain and marked first monthly gain in the last four months, all thanks to foreign fund inflows in primary markets and dollar selling from state-run banks on behalf of exporters.

According to Jateen Trivedi, Senior Research Analyst at LKP Securities, the positive trend in the rupee was backed by gains in the secondary capital market.

With muted dollar prices and good performance in the secondary capital markets helped the rupee. Further, there was no U.S. dollar buying by the RBI or big banks due to the holiday season and this helped the rupee gain momentum from 75.20 to 74.20 in the last week of 2021, Mr. Trivedi said.

On the domestic equity market front, the BSE Sensex ended 459.50 points or 0.80% higher at 58,253.82 while the broader NSE Nifty surged 150.10 points or 0.87% to 17,354.05.

Meanwhile, the dollar index, which measures the greenback’s strength against the basket of six currencies, fell 0.04% to 95.92.

Brent crude futures, the global oil benchmark, fell 0.74% to $78.94 per barrel.

Foreign institutional investors were net sellers in the capital market on Thursday, as they offloaded shares worth ₹986.32 crore, as per exchange data.

Read More : Rupee closes 2021 at 74.29, declines by 1.67% in year

You might also like
Leave A Reply

Your email address will not be published.