On Monday, the Indian rupee rose 8 paise to 81.70 against the US dollar in early trade, tracking the weakness of the American currency in the overseas market. Forex traders mentioned that significant foreign fund inflows and crude oil prices below USD 75 a barrel also supported the local unit. The domestic unit opened strong at 81.76 against the dollar and then climbed to 81.70, marking a rise of 8 paise over its previous close. In comparison, the rupee closed at 81.78 against the US currency on Thursday. However, the forex market was shut on Friday due to Buddha Purnima.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, declined by 0.07 per cent to 101.14. At the same time, Brent crude futures, the global oil benchmark, rose by 0.07 per cent to USD 75.35 per barrel. According to Anil Kumar Bhansali, the Head of Treasury at Finrex Treasury Advisors LLP, the rupee is expected to remain range-bound as the Reserve Bank of India intervened from both sides.
Bhansali also pointed out that the forex reserves have moved towards USD 589 billion, indicating that RBI has been purchasing dollars and gold from the market. The market is currently waiting for Eurozone Industrial Production and US Consumer Inflation Expectation data. The Reserve Bank of India reported that India’s foreign exchange reserves rose by USD 4.532 billion to USD 588.78 billion for the week ending April 28. In contrast, the overall reserves had declined by USD 2.164 billion to USD 584.248 billion in the previous week.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Friday, as they purchased shares worth Rs 777.68 crore, according to exchange data. In the domestic equity market, the 30-share BSE Sensex rose by 447.03 points or 0.73 per cent to 61,501.32. The broader NSE Nifty climbed by 120.65 points or 0.67 per cent to 18,189.65.
In summary, the rupee gained against the US dollar, supported by significant foreign fund inflows, lower crude oil prices, and the weakness of the American currency in the overseas market. However, the rupee is likely to remain range-bound due to RBI interventions from both sides. India’s forex reserves rose, and FIIs were net buyers in the capital market on Friday. The domestic equity market also rose significantly.
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