India’s rupee fell against the U.S. dollar Monday, Nov. 9, after six sessions of gains, as Reuters reported dollar purchases by state-run banks checked the currency’s advance despite support from cheaper oil and foreign equity inflows.
Reuters put the close at 93.9275 rupees per dollar, compared with 93.9050 on Friday, Nov. 6, a decline of 2.25 paise. The Reserve Bank of India (RBI) listed a separate Financial Benchmarks India Ltd. (FBIL) reference rate of 93.8579 rupees per dollar at 1 p.m. IST (7:30 a.m. UTC) Monday. That rate is a midday benchmark, not the reported market close.
State-run banks bought dollars during the session, Reuters reported. Traders told the outlet the orders may have been placed for the RBI. Reuters described an uneven flow in the currency market: companies making import payments needed more dollars than exporters were returning to the market. The outlet said recent RBI steps had narrowed the difference.
A drop in crude prices and renewed foreign buying of Indian equities helped limit the rupee’s losses, Reuters reported. Amit Pabari, managing director at CR Forex, told Reuters that October’s stronger-than-expected employment report had lifted the U.S. dollar. The U.S. Bureau of Labor Statistics (BLS) reported nonfarm payroll employment increased by 165,000 in October.
Reuters also reported the RBI’s net short-dollar position in the forward market reached nearly $240 billion in September, an all-time high. The outlet said that position left the central bank with future dollar commitments to manage. Emkay Global’s Madhavi Arora said sustained inflows could help the RBI rebuild its foreign-exchange buffers.
The BLS schedule lists the October consumer price index release for Tuesday, Nov. 10, at 8:30 a.m. ET (13:30 UTC). A Reuters poll put annual inflation at 3.9%; Pabari told Reuters that a reading above expectations could add support to the dollar. The National Stock Exchange of India (NSE) calendar lists Nov. 10 as a currency-derivatives holiday for Diwali-Balipratipada.
