Rupee rises for sixth straight session to 94.92 against US dollar

The Indian rupee reached a record high for the sixth consecutive day on Friday, trading at 94.92 against the US dollar, according to provisional figures from forex traders. The Reserve Bank of India's efforts to hinder spot dollar demand seem to have contributed to the currency's upward trend. However, the rupee's gains were tempered by higher crude oil prices and foreign fund outflows, as noted by traders.

The rupee began the day at 94.75 against the American currency in the interbank foreign exchange market, with intraday highs of 94.71 and lows of 95.06 before settling at 94.92, marking a 7 paise increase from the previous close. On Thursday, the rupee had risen by 18 paise to close at 94.99 against the US dollar. Commodity Technical Analyst Kaveri More explained that the rupee is nearing a critical support level around 94, and the Reserve Bank has been intensifying its interventions to mitigate the impact of currency weakness on domestic inflation and financial stability.

The RBI's spot dollar sales and dollar-rupee swaps have amounted to approximately USD 75-80 billion since June 8 when its special measures to attract foreign currency inflows began. The effectiveness of the RBI's intervention, movements in crude oil prices and US bond yields, and the pace of foreign investor flows will determine the rupee's near-term direction.

While central bank support may stabilize the currency, sustained external pressures could limit further appreciation. The dollar index declined by 0.41 percent to 101.445, while Brent crude oil prices fell by 0.34 percent to USD 105.56 per barrel. On the domestic stock market, the Sensex added 413.66 points to close at 74,729.27, and the Nifty rose by 148.80 points to reach 23,146.15.

Net equity outflows from Foreign Institutional Investors (FIIs) amounted to Rs 5,285.37 crore on Thursday.