Indian rupee trades in narrow range against UAE dirham after Fed rate hike

The Indian rupee was trading in a narrow range against the US dollar in opening trade on February 2, tracking a muted trend in the Indian equities.

Forex traders said investors preferred to stay on the sidelines as the US Fed policy statement was hawkish.

At the Indian interbank foreign exchange, the rupee opened weak at 81.81 against the dollar, then fell further to 81.86, registering a decline of six paise over its last close. It later pared its losses and was trading flat at 81.80 against the greenback (22.29 versus the UAE dirham).

On Wednesday, the rupee appreciated eight paise to close at 81.80 against the dollar after Finance Minister Nirmala Sitharaman presented the budget for 2023-24.

“The budget ticked most boxes. The government managed to strike a balance between maintaining capex thrust and attaining fiscal consolidation," IFA Global Research Academy said in a research note.

“Estimates for GDP growth, tax buoyancy, disinvestment look reasonable," the research note said, adding that the rupee is likely to trade in an 81.55-81.90 range intra-day with strengthening bias.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.28 per cent to 100.93, after the US Fed hiked the Fed funds rate along expected lines by 25 basis points to 4.50-4.75 per cent.

Brent crude futures, the global oil benchmark, advanced 0.77 per cent to $83.48 per barrel.

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