India News | Rupee Recovers 6 Paise to Close at 79.92 Vs Dollar on FII Inflows

Mumbai, Jul 19 (PTI) The rupee recovered from its all-time low of 80.05 to close 6 paise higher at 79.92 against the US dollar on Tuesday following forex inflows and suspected RBI intervention.

A positive trend in domestic equities and losses in the US dollar in overseas markets also boosted the local unit while a rise in crude oil prices restricted gains.

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At the interbank forex market, the local unit opened lower at 80.00 against the greenback and fell further to its all-time low of 80.05 to a dollar due to overnight gains in crude oil prices.

Firm stock markets, foreign fund inflows into equities for a second straight day and suspected RBI intervention helped the rupee pare losses later.

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The local unit settled at 79.92, registering a rise of 6 paise over its previous close.

On Monday, the rupee for the first time declined to the low level of 80 against the US dollar in intra-day spot trading before ending the session 16 paise lower at 79.98 amid a surge in crude oil prices and unrelenting foreign fund outflows.

"The Indian rupee broke the level of 80 after many days' failed efforts by the dollar bulls amid higher crude oil prices. However, the central bank's intervention and stronger regional currencies and equities supported the rupee to erase early morning losses," said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar further said the near-term consolidation in the rupee is likely along with the dollar index ahead of the European Central Bank (ECB) and Bank of Japan policy meetings on Thursday.

According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the Indian Rupee ended marginally stronger on Tuesday amid talks of the presence of the Reserve Bank of India (RBI) in the markets.

"A recovery in Indian shares and slightly weaker crude oil prices also favoured the rupee," Iyer said.

Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking Ltd said the rupee has depreciated to record lows amid tightening monetary conditions and risk-off sentiments as well as persistent outflows witnessed from the domestic markets.

"Significant dollar demand from oil importers amid elevated crude oil prices as well as concerns about swelling trade deficit have also been the key catalysts behind the steep descent seen in the Indian currency, wherein it has breached past the pivotal 80 mark," Sachdeva said.

The rupee-dollar exchange rate is expected to hover in the 78.50 to 81 band till September, Sachdeva said.

On the domestic equity market front, the BSE Sensex ended 246.47 points or 0.45 per cent higher at 54,767.62, while the broader NSE Nifty advanced 62.05 points or 0.38 per cent to 16,340.55.

The dollar index, which measures the greenback's strength against a basket of six currencies, was down 0.66 per cent at 106.66.

Brent crude futures, the global oil benchmark, fell 0.40 per cent to USD 105.84 per barrel. Crude oil prices had spurted over 5 per cent on Monday.

Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 976 crore, provisional exchange data showed. FIIs bought shares worth Rs 156.08 crore on net basis on Monday.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)