Rupee turns flat at 83.73 against US dollar in early trade

The Indian rupee remained steady at 83.73 against the US dollar on Friday amid sluggish stock markets and an increase in global crude oil prices. This was supported by a weaker US dollar compared to other major currencies following the US Federal Reserve’s decision to keep interest rates unchanged, as well as some foreign capital inflow into Indian equities. At the start of trading at interbank currency exchange, the rupee opened at 83.74 and then rose slightly to trade at 83.73 against the dollar, which was the same level as the previous day’s closing. On Thursday, the rupee had declined by 5 paise to settle at 83.73 against the US dollar.

Anand James, Chief Market Strategist at Geojit Financial Services, mentioned that the rupee’s decline was limited by the probable intervention from the Reserve Bank of India, which sold dollars through state-run banks. He also added that the next important US economic release is the expected July jobs report, due on Friday. Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, fell by 0.07 percent to 104.13. In global futures trade, the price of Brent crude oil, the international oil benchmark, increased by 0.79 percent to USD 80.15 per barrel.

In the domestic stock market, the 30-share BSE Sensex dropped by 614.96 points or 0.75 percent to 81,252.59 during morning trade, while the broader Nifty decreased by 194.80 points or 0.78 percent to 24,816.10.

Foreign institutional investors were net buyers in the capital markets on Thursday and purchased shares worth Rs 2,089.28 crore, according to exchange data. A monthly survey released on Thursday indicated that India’s manufacturing sector growth slightly slowed to 58.1 in July from 58.3 in June due to softer increases in new orders and output.

However, cost pressures and demand strength led to the most significant increase in selling prices since October 2013. Official data released on Thursday revealed that the government’s GST collections in July increased by 10.3 percent to over Rs 1.82 lakh crore, driven by domestic transactions in goods and services.