Rupee rises 2 paise to settle at 82.89 against U.S. dollar

FILE PHOTO: A cashier checks Indian rupee notes inside a room at a fuel station in Ahmedabad, India, September 20, 2018. REUTERS/Amit Dave/File Photo
| Photo Credit: AMIT DAVE

The rupee appreciated 2 paise to settle at 82.89 (provisional) against the U.S. dollar on March 4, tracking a weak American currency overseas and positive equity market sentiment.

However, volatile crude oil prices and foreign fund outflows weighed on the Indian currency, Forex traders said.

At the interbank foreign exchange market, the local unit opened at 82.86 and stayed in a narrow range before settling at 82.89 (provisional) against the greenback, up 2 paise from its previous close.

The local unit touched a low of 82.91 during intra-day deals.

On Friday, the rupee settled 2 paise lower at 82.91 against the U.S. dollar.

Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas, said the rupee opened higher on weak dollar and positive domestic markets. However, it lost its initial gains on reports of dollar buying by public sector banks.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, remained unchanged at 103.79.

Choudhary said the U.S. dollar eased, extending Friday’s losses amid disappointing economic data from the US and positive global equities.

“We expect the rupee to trade with a slight positive bias with a narrow range on the rise in risk appetite in global markets and weak tone in the greenback. However, the surge in crude oil prices may cap a sharp upside. Any further dollar buying by PSU banks or the Reserve Bank of India (RBI) may also weigh on the rupee,” he said, adding that “USD-INR spot price is likely to trade in a range of ₹82.70 to $83.10”.

Brent crude futures, the global oil benchmark, fell 0.08% to $83.48 per barrel.

On the domestic equity market front, Sensex climbed 66.14 points, or 0.09%, to settle at a new peak of 73,872.29. The Nifty rose 27.20 points, or 0.12%, to close at a record 22,405.60.

India’s forex reserves jumped by $2.975 billion to $619.072 billion for the week ended February 23, the Reserve Bank said on Friday.

A monthly survey released on Friday showed India’s manufacturing sector growth climbed to a five-month high in February amid a sharper uptick in factory production and sales, supported by domestic and external demand.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose from 56.5 in January to 56.9 in February, pointing to the strongest improvement in the health of the sector since September 2023.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Saturday as they offloaded shares worth ₹81.87 crore, according to exchange data.