Rupee falls 13 paise to 82.80 against U.S. dollar

RBI said it had asked banks to stop issuing ₹2,000 notes with immediate effect. Image for representation purpose only. File
| Photo Credit: Reuters

The rupee depreciated 13 paise to 82.80 against the U.S. dollar in early trade on May 22, after the central bank said it will withdraw the highest-value currency note from circulation.

At the interbank foreign exchange, the domestic unit fell to 82.80 in initial trade, registering a decline of 13 paise over its last close.

On Friday, the rupee settled at 82.67 against the dollar.

Traders will also assess the impact of liquidity after the RBI’s withdrawal of the highest denomination currency note from circulation, said Sriram Iyer Senior Research Analyst – Commodities & Currencies Reliance Securities Limited.

Moreover, doubts emerged about the debt-ceiling negotiations and a possible default could hurt the U.S. economy and ultimately hurt sentiments back home.

The Reserve Bank of India (RBI) on Friday made the surprise announcement but gave the public time till September 30 to either deposit ₹2,000 notes in accounts or exchange them at banks.

It said it had asked banks to stop issuing ₹2,000 notes with immediate effect.

Also Read | SBI’s u-turn: No slip, ID proof needed to swap ₹2,000 notes

However, markets could find support as the dollar was marginally weak on Monday on a slightly less hawkish Jerome Powell’s comments on rates, Mr. Iyer added.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.14% to 103.04.

Brent crude futures, the global oil benchmark, rose 0.87% to $74.92 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 254.67 points or 0.41% higher at 61,984.35. The broader NSE Nifty declined 86.50 points or 0.48% to 18,289.90.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth ₹113.46 crore, according to exchange data.

Meanwhile, rising for the second consecutive week, India’s forex kitty jumped $3.553 billion to $599.529 billion for the week ended May 12, the RBI said on Friday.

The overall reserves had jumped by $7.196 billion to $595.976 billion for the previous week.