Rupee opens marginally higher at 74.62 per dollar

Indian rupee opened marginally higher at 74.62 per dollar on Friday against previous close of 74.65, amid selling seen in the domestic equity market.

On November 12, the rupee ended 28 paise lower at 74.65 per dollar versus Wednesday close of 74.37.

At 10:02 IST, the Sensex was down 197.69 points or 0.46% at 43159.50, and the Nifty was down 55 points or 0.43% at 12635.80.

“The dollar rupee still being bought by RBI and other importers keeping Rupee well offered at all levels from 73.50. RBI has been buying all the supplies of dollar and has infact ensured a weak rupee despite appreciation in All EM and Asian currencies. They have been unrelenting even if there is an intra-day appreciation or stock markets are continuing to show uptrend,” said Anil Kumar Bhansali - Head of Treasury, Finrex Treasury Advisors.

“May be before Diwali we could see 74.50 levels. But if RBI does not allow the rupee to appreciate even a bit then we may be in for some serious depreciation. The reasoning for RBI buying is not clear as inflation has been up and with oil prices rising a rupee depreciation could bring in higher inflation in coming weeks. For the day 74.50/90 seems to be the range,” he added.

Oil prices fell in early trade on Friday as a spike in the number of COVID-19 infections raised fears for the global economy and near-term fuel demand, but remained on track for a second straight weekly gain amid hopes for a vaccine.

Gold prices were little changed on Friday, as fears of an economic impact due to a surge in global cases of COVID-19 countered optimism from the developments in a potential vaccine.

Short covering rally was seen in rupee due to which sharp depreciation was seen. We feel Dollar index would rest near 93 levels and the rupee would traded near 74.5 levels in coming sessions, said ICICIdirect.

The dollar-rupee November contract on the NSE was at 74.70 in the last session. The open interest fell 2.6% for the November series contract, it added.