Rupee rises 5 paise to 94.46 against US dollar in early trade
Forex traders said the rupee is poised to gain strength, supported by strong underlying inflows and aggressive RBI intervention. However, higher crude oil prices and potential US-Iran tensions could limit further gains.
The Indian rupee climbed 5 paise to trade at 94.46 against the US dollar on Friday, buoyed by expectations of increased foreign investments and an uptick in risk appetite. Traders anticipate the rupee will continue to strengthen, fueled by robust inflows and the Reserve Bank of India's (RBI) active intervention. However, potential concerns such as surging crude oil prices and US-Iran tensions might curb further gains.
The rupee opened at 94.53 against the US dollar in the interbank foreign exchange market, subsequently climbing to 94.46, marking a 5-paise gain since its last close. On Thursday, the rupee's upward trajectory continued for the fifth consecutive day, surging 22 paise to close at 94.51 against the US dollar. India attracted a record $127.23 billion in foreign-currency deposits via a special central bank program designed to enhance the nation's foreign-exchange liquidity.
Combining overseas foreign-currency borrowings (OFCB) and external commercial borrowings (ECB), cumulative inflows under these measures hit $136.377 billion, according to RBI data. While the surge in foreign currency deposits has significantly bolstered the rupee, fundamental risks still persist. The range of 94.00-94.20 continues to serve as a strong support zone for the rupee.
Should there be a negative shock, particularly from oil-related factors, the USDINR pair could revert to levels around 95.00, 95.50, or even 96.00, cautioned Amit Pabari, MD of Forex Advisors. The dollar index, which measures the greenback's strength against six major currencies, traded at 99.05, up 0.15 percent due to safe-haven demand amid heightened US-Iran tensions.
Brent crude, the global oil benchmark, rose by 0.40 percent to $95.90 per barrel, driven by escalating US-Iran tensions and fears of oil disruptions through the Strait of Hormuz. On the domestic stock market, the Sensex advanced 468.64 points to 76,621.50, while the Nifty rose 42.10 points to 23,915.55. Foreign institutional investors made a net purchase of equities worth ₹2,345.87 crore on Thursday, as per exchange data.
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- Rupee Gains Ground In Early Trade, Rises 5 Paise To 94.46 Against US Dollar freepressjournal.in
