The Indian rupee opened higher versus the US dollar on September 7, with the central bank’s recent aggressive presence likely to temper the impact of higher crude prices and the increased likelihood of a U.S. Federal Reserve rate hike next week.
The rupee opened higher by 10 paise at 94.39 per dollar, compared with Friday’s close of 94.49.
According to Finrex, the Rupee is to open at 94.50 and should remain in the range of 94.00 to 94.75 as RBI protects the weakening of the rupee flush with surplus funds to sell dollars as it also gives it the opportunity to absorb the surplus rupee funds.
The RBI will also be doing a VRRR today for Rs. 7.00 lakh crores for a period of 30 days to absorb the surplus rupee liquidity.
Exporters to wait for upticks to hedge their receivables while they may sell their cash at > 94.50 for the day. Importers to keep buying the dips to hedge their payables for September and some extent October. Today being a US holiday the cash demand for dollars will be less, it added.
Asian currencies mostly gained against the US dollar, led by the South Korean won, which rose 0.69%, followed by the Indonesian rupiah (0.21%), Japanese yen (0.23%), Taiwan dollar (0.16%) and Chinese renminbi (0.12%). The Thai baht gained 0.10%, while the Philippine peso slipped 0.12%, Malaysian ringgit fell 0.03% and Singapore dollar declined 0.02%.
The dollar was on shaky ground on Monday, despite a ramp-up in U.S. rate hike bets as Middle East tensions raised the prospect of broader inflationary pressures that could force global central banks to tighten policy in tandem.
