Rupee rises 4 paise to close at 83.88 against U.S. dollar

Representational image.
| Photo Credit: The Hindu

The rupee witnessed range-bound trade and settled for the day higher by 4 paise at 83.88 (provisional) against the U.S. dollar on Monday (September 16, 2024) supported by weak American currency and significant foreign fund inflows, while firm crude oil prices capped sharp gains.

Forex traders said market participants are eagerly awaiting cues from the U.S. Fed policy on Wednesday (September 11, 2024), with a rate cut all but certain. However, the magnitude of the cut remains uncertain.

Moreover, the rupee continues to hold steady within a well-defined range on active intervention by the Reserve Bank of India (RBI), they added.

At the interbank foreign exchange market, the local unit opened at 83.89 and witnessed an intraday high of 83.87 and a low of 83.90 against the American currency.

The domestic unit finally settled for the day at 83.88 (provisional), higher by 4 paise over its previous close, amid a positive trend in domestic equities.

On Friday (September 13, 2024), the local unit settled higher by 4 paise at 83.92 against the U.S. dollar.

“We expect the Indian rupee to trade with a slight positive bias on continued weakness in the U.S. dollar ahead of the FOMC meeting this week,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Choudhary further said that “there are broad expectations of a 25 bps rate cut by the Fed following a 25 bps rate cut by ECB last week. Fresh foreign inflows and a positive tone in equity markets may further support the domestic currency. However, a recovery in crude oil prices may cap sharp upside.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.39% to 100.72 points.

Brent crude, the international benchmark, gained 0.56% to USD 72.01 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex advanced 97.84 points, or 0.12%, to close at 82,988.78 points, while the Nifty rose 27.25 points, or 0.11%, to 25,383.75 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday (September 13, 2024), as they purchased shares worth ₹2,364.82 crore, according to exchange data.

Meanwhile, India’s forex reserves jumped USD 5.248 billion to a new all-time high of USD 689.235 billion for the week ended September 6, the Reserve Bank of India said on Friday (September 13, 2024).

The overall kitty had jumped by USD 2.299 billion to a record USD 683.987 billion for the previous reporting week.