Indian rupee depreciated against the US dollar on Friday due to FPI outflows from Indian equities. Sentiments got hit after a private report stated that a 21% increase in onion prices in just four days to a five-year high of more than Rs 60 per kg in several markets is likely to weigh on inflation data for November. Potato and cooking oil prices are also expected to stay higher this month. Meanwhile, S&P Global’s report stated that fight for deposits in an eventually declining rate cycle in India will add pressures on the net interest margins (NIM) for banks by 20 basis points. It said banks may see a further margin squeeze if credit and deposit growth remain steady. On the global front, US Dollar (USD) stabilized on Friday after founding support as investors digested the Federal Reserve’s (Fed) decision to lower its monetary policy rate by 25 basis points to the 4.50%-4.75% range on Thursday.
Finally, the rupee ended at 84.37 (Provisional), depreciated by 4 paise from its previous close of 84.33 on Thursday. The currency touched a high and low of 84.38 and 84.31 respectively.
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