Mumbai: The rupee appreciated 40 paise to 87.68 against the US dollar in early trade on Thursday, primarily driven by central bank intervention, a softer dollar index.
Forex traders said other supportive factors like positive domestic equities, lower crude oil prices, and renewed foreign fund inflows also boosted investor sentiments.
At the interbank foreign exchange market, the rupee opened at 87.76 and then gained ground and touched an early high of 87.68 against the US dollar, registering a gain of 40 paise from its previous close.
On Wednesday, the rupee experienced a significant rebound, rising by 73 paise to close at 88.08 against the US dollar, representing its largest intraday gain in nearly four months. This surge was largely driven by easing global risk sentiment, optimism surrounding India-US trade discussions, and anticipated intervention by the Reserve Bank of India (RBI).
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, stated, “RBI ensured that the rupee opens higher, thus curbing all speculative trades yesterday and not allowing the rupee to fall past 88.39 on Wednesday.”
The rupee’s positive opening suggests it is expected to trade within a range of 87.30 to 88.00, indicating the RBI’s commitment to eliminating speculative trades that could weaken the currency.
In related market activity, the dollar index, which measures the greenback’s strength against a basket of six currencies, was down by 0.28 percent at 98.51. Meanwhile, Brent crude, the global oil benchmark, saw a rise of 0.74 percent, trading at USD 62.37 per barrel in futures.
On the domestic equity front, the Sensex surged by 407.67 points to 83,013.10 in early trading, while the Nifty increased by 104 points to 25,427.55. Additionally, Foreign Institutional Investors (FIIs) purchased equities worth Rs 68.64 crore on Wednesday, according to exchange data.
In economic news, India’s exports grew by 6.74 percent to USD 36.38 billion in September, while imports surged by 16.6 percent, resulting in a trade deficit of USD 31.15 billion, the highest in over a year.
