By The Indian rupee opened strong on Thursday, gaining 27 paise to trade at 82.32 against the US dollar, bolstered by a weak American currency and an inflow of foreign funds into the domestic equity market. Traders also noted that declining crude oil prices contributed to the rupee’s rise. The Indian currency opened at 82.38 against the dollar and rose as high as 82.26 before hitting a low of 82.41. Later, it settled at 82.32, marking a gain of 27 paise from its previous close.
On Tuesday, the rupee had settled at 82.59 against the US dollar. The foreign exchange market remained closed on Wednesday due to Gudi Padwa.
The dollar index, which measures the greenback’s strength against a basket of six currencies, was down 0.23 per cent at 102.11, while the global oil benchmark, Brent crude futures, fell by 0.86 per cent to $76.03 per barrel.
At the same time, the 30-share BSE Sensex was trading 340.92 points or 0.59 per cent lower at 57,873.67 points, and the broader NSE Nifty was down 84.25 points or 0.49 per cent at 17,067.65 points. The US Federal Reserve’s decision on Wednesday to raise interest rates by a quarter of a percentage point, in line with market expectations, boosted overall investor sentiment.
Foreign Institutional Investors (FIIs) turned net buyers in the domestic capital market on Wednesday, purchasing shares worth Rs 61.72 crore, according to exchange data.
The rupee’s rise was also attributed to the Reserve Bank of India’s (RBI) intervention in the currency market. The RBI has been purchasing dollars to build up its foreign exchange reserves, which hit a record high of $612.73 billion in the week ended March 12.
Analysts predict that the rupee will continue to strengthen in the coming months, aided by the country’s strong economic fundamentals and a weak US dollar. However, they warn that rising crude oil prices could put pressure on the rupee in the short term.
In conclusion, the Indian rupee gained 27 paise to trade at 82.32 against the US dollar, buoyed by a weak American currency, foreign fund inflows, declining crude oil prices, and the RBI’s intervention in the currency market. The rupee’s rise is expected to continue in the near future, but rising oil prices could pose a challenge.