Rupee Fluctuates In Narrow Range Against Dollar

The rupee moved in a narrow range in early trade on Tuesday, a day after Moody's lowered India's credit rating to a notch above junk. It moved in a range of 75.53-75.60 in the first half of the four-hour session, having started the day nearly unchanged at 75.56 compared to its previous close of 75.54. While strength in the dollar overseas kept pressure on the rupee, extended gains in the domestic equity markets amid foreign inflows provided some support to the currency, say analysts.

On Monday, Moody's Investors Service downgraded the country's credit rating to "Baa3" from "Baa2" citing a prolonged period of slow growth in Asia's third largest economy, rising debt and persistent stress in parts of its financial system.

The cut is not driven directly by the impact of the coronavirus but that the pandemic had amplified vulnerabilities in the country's credit profile that were present and building prior to the shock, Moody's said.