Rupee ended slightly lower, Dollar slips lower vs. major currencies
Friday,
17-Mar-2023
04:13 PM (IST)
The Indian rupee ended the session slightly lower at 82.5525/5625 levels compared to its opening at 82.4850/4950 levels after touching the low of 82.58/59 levels on likely dollar buying by importers. Rupee traded in the range of 82.4350-82.58 levels today. Rupee had opened higher today and touched the high of 82.4350/4450 levels as the broader market sentiment improved following the rescue of crisis-hit banks in the United States and Europe. The rupee rose during the day but mostly hovered near the key resistance level of 82.50. Markets were upbeat after U.S. lender First Republic Bank was rescued by a $30-billion injection from 11 banks. Indian government bond yields rose as trader’s awaited Federal Reserve policy decision due next week. The Sensex and Nifty ended higher for the second straight trading session on Friday backed by renewed buying interest in IT and banking stocks. The S&P BSE Sensex ended 355 points higher at 57,990. The NSE Nifty 50 advanced 114 points as it reclaimed the 17,100 level. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 2.81%, 2.46% and 2.35% respectively.
The dollar slipped on Friday after top U.S. power brokers including the government and banks threw a lifeline to a struggling regional lender to ease stress on the financial system, which returned some confidence to investors. The rescue of First Republic Bank in the U.S. on Thursday boosted risk appetite globally on Friday as concerns about global banks eased, making way for surges in the Australian and New Zealand dollars. This week has revived memories of the 2008 financial crisis, in which dozens of institutions failed or were bailed out with billions of dollars of government and central bank money. Three smaller U.S. lenders have had regulators and other banks step in to prop them up, while in Europe, Credit Suisse became the first major global bank to get an emergency lifeline from the Swiss central bank since the financial crisis, restoring investor confidence and stopping a haemorrhage in customer deposits. With measures in place to shore up any obviously struggling lenders and assurances from the likes of the European Central Bank that the euro zone banking system is robust, investors felt emboldened enough to sell the safe-haven U.S. dollar. Meanwhile, the European Central Bank (ECB) delivered a hefty 50-basis-point rate hike at its policy meeting on Thursday. ECB policymakers, led by President Christine Lagarde, sought to reassure investors that euro zone banks were resilient and that if anything, higher rates should bolster their margins. Japan's Ministry of Finance, Financial Services Agency and Bank of Japan officials will meet on Friday evening to discuss financial markets, the Nikkei newspaper reported, amid fears of the U.S. banking crisis. The Federal Reserve's monetary policy meeting next week now moves to centre stage. Some investors are hoping that the Fed could slow down on its aggressive rate-hike campaign in a bid to ease the stress on the financial sector.
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