Indian rupee ended lower against the dollar on Wednesday tracking a broad-based selloff in domestic markets. Some concern came after growth in factory output, based on the Index of Industrial Production (IIP), slowed to 3.8 per cent in January 2024, mainly due to poor performance of manufacturing, mining and power sectors. It was 5.8 in January 2023. The IIP figures for December 2023 was revised upward to 4.2 per cent from 3.8 per cent earlier estimate. Investors overlooked reports that India’s retail inflation eased to a four-month low of 5.09 per cent in February 2024. The inflation based on Consumer Price Index (CPI) was almost unchanged compared to the January number of 5.10 per cent, though prices of certain items in the food basket firmed up. On the global front, U.S. dollar index held steady on Wednesday as traders shrugged off hotter-than-expected U.S. inflation and still expected a Federal Reserve interest rate cut in June. The U.S. consumer price index (CPI) increased solidly in February, beating forecasts and suggesting some stickiness in inflation.
Finally, the rupee ended at 82.84 (Provisional), weaker by 4 paise from its previous close of 82.80 on Tuesday. The currency touched a high and low of 82.91 and 82.82 respectively.
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