Rupee strengthens against dollar on Wednesday

Indian rupee strengthened against the dollar on Wednesday as persistent foreign capital inflows and fall in crude oil prices strengthened investor sentiment. Traders got some encouragement, as Reserve Bank of India (RBI) is all set to launch the first pilot for retail digital Rupee on December 01, 2022.  The pilot would cover select locations in closed user group (CUG) comprising participating customers and merchants. The retail digital Rupee would be in the form of a digital token that represents legal tender. Besides, Finance Ministry has called a meeting of CEOs of banks, including top six private sector lenders, on December 5, 2022 to discuss ways to promote cross-border trade in the rupee instead of the US dollar.  On the global front, dollar eased from a one-week high on Wednesday ahead of a speech by Federal Reserve Chair Jerome Powell, while optimism over a possible loosening in China's COVID restrictions set it on course for its biggest monthly loss since late 2010. Besides, Euro zone inflation in November showed the first monthly deceleration since June last year, as harmonised consumer prices rose by just 10% last month, compared with expectations for an increase of 10.4% in November, and against October's final reading of 10.6%.

Finally, the rupee ended at 81.38 (Provisional), stronger by 34 paise from its previous close of 81.72 on Tuesday. The currency touched a high and low of 81.64 and 81.38 respectively.