After hitting record lows in the last few days, the rupee strengthened on Wednesday following an upgrade of India’s sovereign rating outlook to ‘stable’ from ‘negative’ by Fitch Ratings. The support from banks and exporters also helped the rupee strengthen. However, the rupee still remains weak against major currencies.
The rupee closed at 57.79/80 per dollar compared to its previous close of 58.39/40. It strengthened to 57.72 per dollar in the intra-day.
Fitch Ratings cited the government’s efforts in containing the fiscal deficit and the progress made in improving investment and economic growth in the country as reasons for its revision in the rating outlook.
Even though the rupee made an upward move against the dollar, the domestic economy still remained weak, which raises concerns.
“On the forex front, the rupee recovered some of its lost ground possibly due to RBI intervention in the forex markets,” said Sanjeev Zarbade, Vice-President- Private Client Group Research, Kotak Securities.
Meanwhile, the stock markets dipped further following diminishing rate cut hopes even as inflation continued to remain high.
The BSE 30-share sensitive index closed at 19041.13 with a loss of 101.87 points. The BSE 100 closed down by 0.58 per cent. A broader 50-share NSE Nifty closed at 5760.20 with a loss of 28.60 points. “Negative global cues and lack of buying support from the FIIs led to continued weakness in the Sensex on Wednesday. Several stocks were trading sharply lower,” said Mr. Zarbade.