Rupee ends higher on foreign, state-run banks’ dollar sales; rises on week

Photo used for representation purpose only. The rupee rose on April 5, bolstered by dollar sales from foreign and state-run banks and after the central bank kept rates unchanged for a seventh consecutive meeting.
| Photo Credit: The Hindu

The rupee rose on April 5, bolstered by dollar sales from foreign and state-run banks and after the central bank kept rates unchanged for a seventh consecutive meeting.

The rupee closed at 83.2950 against the U.S dollar, up nearly 0.2% compared with its close of 83.4375 in the previous session.

The currency logged a gain of 0.1% week-on-week, rebounding from a record low of 83.4550 hit on Thursday.

Dollar sales picked up after the rupee managed to hold above 83.45 despite a raft of weak global cues, a FX trader at a foreign bank said.

Brent crude oil prices rising above $90 per barrel for the first time since October and hawkish comments from Federal Reserve policymakers weighed early in the session.

But foreign and state-run banks’ dollar sales after the Reserve Bank of India’s (RBI) policy decision helped lift the rupee, traders said.

Stop losses were hit after the currency rose above 83.35, which led to traders exiting long dollar positions, the foreign bank trader said.

Five out of six members of India’s rate-setting committee voted in favour of a pause and for holding the monetary stance at ‘withdrawal of accommodation’.

The robust growth prospects provide the central bank the space to remain focused on inflation, RBI Governor Shaktikanta Das said.

Investors now await the U.S. non-farm payrolls report due later on Friday. The U.S. likely added 200,000 jobs in March, according to a Reuters poll of economists.

The dollar index was little changed at 104.2 while Asian currencies were mixed.

The rupee is likely to trade with a modest appreciation bias over the next few sessions, Arnob Biswas, head of foreign exchange research at SMC Global Securities said. (Reporting by Jaspreet Kala; Editing by Mrigank Dhaniwala)