On Monday, the government appointed Sanjay Malhotra, the Revenue Secretary, as the 26th Governor of the Reserve Bank of India. Forex traders noted that markets now anticipate a rate cut in the upcoming monetary policy decision in February.
The rupee faced pressure from a weak domestic market and a rising US dollar index. During intra-day trading, the rupee opened at 84.80 and fell to a low of 84.86 against the dollar, ultimately closing at 84.85 (provisionally), a slight increase of just 1 paisa from the previous close.
On that day, the rupee experienced its largest drop in over a month, falling 20 paise to reach a record low of 84.86 against the US dollar.
Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, commented that the rupee is likely to trade negatively due to the strength of the US dollar and rising crude oil prices, although recent foreign institutional investments might provide some support at lower levels.
He added that any intervention by the RBI could also bolster the rupee. Investors are expected to be cautious ahead of US inflation data set to be released on Wednesday, which is predicted to be higher than in the previous month.
The USD-INR spot price is anticipated to fluctuate between 84.65 and 85.10, he stated. Shaktikanta Das, who will leave his position as the RBI Governor on Tuesday, played a pivotal role in both the planning and execution of India’s demonetization and the implementation of the goods and services tax (GST).
He also guided the monetary policy during the challenging times of the pandemic. In the domestic stock market, the 30-share benchmark index Sensex closed flat at 81,510.05, up by only 1.59 points, while the Nifty dropped by 8.95 points, or 0.04%, to finish at 24,610.05 points.
On Monday, Foreign Institutional Investors (FIIs) were net buyers, purchasing shares worth ₹724.27 crore, according to exchange data.
