India's inclusion in a major global bond index will open doors to increased foreign investment in the nation's debt market, traders said.
Forex traders said the dollar strengthened post the release of the US inflation number that was reported higher-than-expectation and weighed on the domestic unit.
Forex traders said the rupee is witnessing range-bound trading against the dollar as the support from positive domestic equities was negated by elevated crude oil prices and a firm US dollar.
It opened at 82.92 against the dollar. It touched a low of 82.95 against the American currency in initial trade.
In the initial trade, the rupee also touched a low of 83.00 against the greenback.
This makes transactions between retail digital rupee wallets compatible with UPI and consequently paving the way for wider adoption of electronic currency.
At the interbank foreign exchange, the rupee opened at 82.78 against the US dollar and settled at 83.06 (provisional) against the greenback.
With the ‘eRupee by SBI’ application, SBI CBDC users can scan any merchant UPI QR code for transactions, the bank announced on Monday.
At the interbank foreign exchange, the domestic unit opened strong at 82.58, then touched the lowest level of 82.63 against the greenback.
The outflow of foreign funds and relatively higher crude prices weighed on the domestic unit, according to forex traders.
Retreating crude oil prices also supported the Indian currency even as an outflow of foreign funds capped a sharp gain, forex traders said.
Taking cues from RBI’s liquidity tightening measures, the overnight call money rates have risen over the past few weeks.
At the interbank foreign exchange market, the local unit opened at 83.07 against the US dollar and moved in a range of 82.93 to 83.09 in the day trade.
With the introduction of this innovative feature, customers will be able to make payments by scanning merchant UPI QR codes using Canara Digital Rupee app.
Dollar witnessed its longest winning streak in the last 15 months following safe haven buying on the back of uncertainty in China and better-than-expected economic numbers from the US,.
The Reserve Bank of India (RBI) stepped in the market to arrest the slide and sold dollars via public sector banks, which helped the local currency to stabilise.
Even though the falling rupee may not benefit the entire economy, a devalued currency certainly has its merits as it aids in boosting exports.
Foreign fund inflows and softening crude prices, however, supported the Indian currency even as investors were awaiting India's industrial output number, to be released later in the day, said analysts
Forex traders said the rupee appreciated tracking a weak tone in the US dollar.
At the interbank foreign exchange, the domestic unit opened stronger at 82. 81 against the dollar and touched 82.80, registering a gain of 5 paise over its previous close.