Rupee rises 7 paise to 95.19 against US dollar in early trade
According to forex traders, sustained inflows and an easing of the oil import burden would provide a stronger foundation for rupee appreciation.
The Indian rupee experienced a rise of 7 paise to 95.19 against the US dollar in early trading on Friday, bolstered by a weaker greenback and falling US Treasury yields. Despite crude oil prices surging, which initially limited the gains, the forex market anticipated that ongoing inflows and a decrease in oil import costs would strengthen the rupee's appreciation prospects.
The initial trading range for USDINR was set at 94.75-95.75. The rupee commenced the day at 95.21 and swiftly climbed to 95.19, marking a 7-paise increase over its prior session's close. On Thursday, the currency had remained stable in a narrow band and concluded 2 paise higher at 95.26 against the greenback. According to Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, the Indian rupee opened firmly on the back of a weak dollar and a softening of US Treasury yields.
Still, the currency's ascent was curtailed by a surge in crude oil prices and sluggish Asian markets. ECB and Bank of Japan opted to maintain interest rates unchanged, according to Anindya Banerjee, Head of Commodity and Currency Research at Kotak NEO. The RBI's involvement was expected to be crucial in maintaining a systematic currency movement.
Upcoming factors that could influence the currency include events in West Asia, the US midterm elections on Tuesday, and inflation and employment data that will guide December's policy decisions, as noted by Banerjee. In domestic equity markets, the Sensex climbed 138.77 points to 74,289.81 at the opening bell, while the Nifty jumped 38.95 points to 22,967.10.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 943.60 crore on a net basis on Thursday, as per exchange data. The IMF suggested that exchange rate flexibility should be the primary policy response to assist India in mitigating energy shocks, with RBI intervention to bolster the rupee. IMF Communications Director Julie Kozack emphasized the importance of the rupee as the first line of defense against such shocks.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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