Mumbai, Dec 18 (PTI) The rupee appreciated 18 paise against the US dollar to settle at 90.20 on Thursday, despite the broad strength of the American currency in the overseas market on possible intervention
by the Reserve Bank of India (RBI).
Forex traders said Brent crude oil prices hovering near USD 59 per barrel supported the domestic unit at lower levels. However, a recovery in the dollar index and weak domestic markets capped sharp gains.
At the interbank foreign exchange, the rupee opened at 90.35 against the US dollar, then recovered some lost ground to touch an intra-day high of 90.04, registering a 34 paise gain from its previous close.
At the end of trading session on Thursday, the rupee was quoted at 90.20, registering a gain of 18 paise over its previous close.
On Wednesday, the rupee recovered 55 paise from its all-time low to close at 90.38 against the greenback.
“The rupee appreciated against the US dollar amid selling of dollars by the Reserve Bank of India. The RBI reportedly intervened in the forex markets and sold dollars to prevent further side in the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.
Choudhary further noted that “we expect the rupee to trade with a negative bias on FII outflows on the back of delay in trade deal between India and US. Recovery in US dollar index and rebound in crude oil prices may also pressurise the rupee”.
Traders may take cues from US CPI inflation and weekly unemployment claims data. Investors may watch out for central bank monetary policy decisions from BOE, ECB and BoJ. USDINR spot price is expected to trade in a range of 90 to 90.60, Choudhary added.
Meanwhile, Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal on Thursday said he is not concerned about the rupee at all, arguing that even China and Japan witnessed exchange rate weaknesses during their high growth phases.
Speaking at ‘Times Network’s India Economic Conclave 2025’, Sanyal said since the 90s, the rupee has mostly been allowed to find its own level, but the RBI uses its reserves to intervene in either direction to stop excessive volatility.
“I am not concerned about the rupee at all… Let me say that the rupee and its current weakness should not be necessarily conflated with some economic worry, because historically, if you go over time, you will see that economies that are in their high growth phase very often go through a phase of exchange rate weakness,” he said.
The rupee sank to a fresh record low, breaching the 91-a-dollar mark for the first time on Tuesday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.16 per cent higher at 98.52.
Brent crude, the global oil benchmark, was trading higher by 0.35 per cent at USD 59.89 per barrel in futures trade.
On the domestic equity market front, the Sensex declined 77.84 points to settle at 84,481.81, while the Nifty dipped 3 points to 25,815.55.
Foreign institutional investors purchased equities worth Rs 595.78 crore on Thursday, according to exchange data. PTI DRR TRB
