Rupee slumps 18 paise against US dollar to 74.36
Mumbai: The rupee declined by 18 paise to close at 74.36 against the US dollar on Wednesday, tracking a strengthening American currency in the overseas market and higher crude prices.
However, a strong rally in domestic equities and unabated foreign fund inflows restricted the slide of the domestic unit, forex traders said.
At the interbank foreign exchange market, the local currency opened on a weak note at 74.24 and swung between the day's high of 74.18 and a low of 74.50 to the US dollar.
The rupee finally settled at 74.36 against the greenback, down 18 paise over its previous close.
The rupee had ended at 74.18 on Tuesday.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.15 percent to 92.87.
Meanwhile, Brent crude futures, the global oil benchmark, spiked 3.26 percent to USD 45.03 per barrel.
"Indian rupee depreciated amid strong dollar and surge in crude oil prices. Further, the rupee slipped on worries over a slowdown in global economic recovery due to a resurgence in COVID-19 cases.
"Further, the market remained cautious ahead of key macro-economic data like CPI and IIP... Rupee may trade in a range of 73.80 to 74.80 in the next couple of sessions," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.
The BSE Sensex surged 316.02 points or 0.73 percent to close at a record 43,593.67.
Similarly, the broader NSE Nifty climbed 118.05 points or 0.93 percent to its all-time closing high of 12,749.15.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 5,627.32 crore on Tuesday, according to provisional exchange data.
"India CPI data is likely to show that Inflation remained above the Reserve Bank of India medium-term target range of 2-6 percent. India's Industrial Production data forecasted to show factory output contracted for 7 consecutive months," Mukadam added.
Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities, said, "Indian rupee fell in line with other Asian currencies as dollar index rebounded and tracking the spike in crude oil prices. The rupee has been relatively weak even after strong foreign fund flows of around USD 2.3 billion in equities as RBI chose to absorb the flows rather than letting currency appreciate."
Oil futures rose after a report showed that US crude inventories fell by more than expected as prices continued to be supported by news of successful trials of a vaccine for coronavirus, he added.
Expectations of recovery have boosted Asian currencies and led to a broad-based rally in Asian shares and capped losses in the domestic unit, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
"The Indian Rupee depreciated against the US Dollar on constant dollar-buying by state-run lenders, rumored to be on behalf of the central bank, to offset the impact of foreign inflows... So far the Indian equities and debt markets have already seen close USD 3 billion inflows this month and we believe that RBI could be present to mop the flows," he added.
"We expect the USD/INR (Spot) to trade higher and quote in the range of 74.05 and 74.50," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
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Tata-Airbus helicopter facility shining example of partnership in high-end manufacturing: Rajnath
Kolar (Karnataka) (PTI): Defence Minister Rajnath Singh on Tuesday said the investment into H-125 helicopter programme is "anticipated" to cross Rs 1000 crore, and create a number of jobs, and called it a "shining example" of mutually beneficial partnership with friendly countries in high-end manufacturing sector.
He was speaking at the inaugural ceremony of the final assembly line of H-125 helicopters here.
Prime Minister Narendra Modi and French President Emmanuel Macron virtually inaugurated the Airbus H125 light utility helicopter Final Assembly Line at Tata‑Airbus' facility at Vemagal Industrial Area in this district from Mumbai.
Singh, accompanied by his French counterpart Catherine Vautrin, congratulated Tata Advanced System and Airbus Helicopters on the inauguration of the project and recalled their earlier association as well.
"This project is a shining example of mutually beneficial partnership with friendly countries in high-end manufacturing sector," Singh said.
"The H-125 program investment is anticipated to exceed Rs 1000 crore and is likely to create direct and indirect employment opportunities for our skilled and hard working younger generation," he said.
Renowned for its exceptional reliability, versatility, and outstanding performance under diverse operating conditions, the H-125 has proven to be one of the most effective and trusted single-engine helicopters globally, he said.
He recalled that Tata Advanced Systems and Airbus had earlier joined hands for a project in Gujarat's Vadodara for the C-295 aircraft, which he described as a symbol of how Tata in particular and India in general can collaborate with international OEMs to contribute to the vision of a stronger India.
The Defence minister said "Make in India" and self-reliance have been the cornerstone of India's economic policy since 2014.
Singh recalled that this policy initiative was launched by PM Modi, under which India is committed to achieving self-reliance in critical technology and the manufacturing of high-end products and equipment through mutually beneficial partnerships.
"For more than a decade, India has been charting industrial development through large-scale infrastructure building, capital infusion in important sectors through a number of incentive schemes on the one hand, and providing a level playing field for facilitating investment on the other," he said.
He added that it has also been the government's focus to support small and medium industries and strengthen the startup ecosystem in particular. Overall, the focus has been on holistic industrial development, which not only caters to domestic demand but also addresses the needs of other countries.
Highlighting reforms in the defence sector, Singh said these measures have augmented the contribution of the private sector in the defence industrial ecosystem.
According to him, historically, Indian defence production was largely public sector-oriented due to requirements of high capital investment and long gestation periods, resulting in the private sector's contribution being far less than desired.
However, with reforms such as the corporatisation of ordnance factories, establishment of defence industrial corridors, and other initiatives to raise the private sector's share in total defence production, it now stands at almost a quarter of the country's total defence production.
Defence exports have also increased manifold, placing India among the top exporters in the world, he said.
Singh said the growth trajectory has given a massive boost to MSMEs and ancillary sectors, which have grown to more than 16,000 in number, with many foreign companies sourcing components from Indian MSMEs.
He invited companies to deepen the partnership through meaningful technology transfer and offer platforms to meet the security needs of other countries as well.
Union Civil Aviation Minister K Rammohan Naidu, who also attended the event said the H125 final assembly line set up by Tata and Airbus marks a defining moment for India's aerospace sector, calling it "a proud symbol of rising confidence in India's high-precision aerospace capabilities."
He described defence and civil aviation as "two strategic pillars of the Indo-French partnership" and said the new facility would reinforce "a single integrated aerospace ecosystem" by assembling both civil and defence variants.
Noting that India has risen from the 10th to the third largest civil aviation market in just 11 years, Naidu asserted that the country now has "the market, the export potential, the policy ecosystem, the skilled workforce and the strategic global partnerships to emerge as a rotary-wing manufacturing hub".
"The future of rotary aviation in South Asia will be designed, manufactured, certified, maintained and exported from India," he said, adding that the country is "not just flying high, but flying past all horizons" under the Make in India and Viksit Bharat 2047 visions.
Tata Advanced Systems CEO and MD Sukaran Singh said in this facility here, "we will start building helicopters without any government or defense orders."
"However, we will be ready to supply the defense forces as and when they want. The first helicopter will fly out this facility by mid 2027."
