The Indian rupee on Friday strengthened further against the US dollar to appreciate up to Rs 83.48 per dollar during the day, before settling at 83.57 per dollar—a two-month high. The local currency witnessed its highest weekly gain in the current calendar year. The domestic unit appreciated by 0.4 per cent against the dollar during the week.
The rupee, which had settled at Rs 83.69 per dollar on Thursday, gained about 0.1 per cent.
The local currency rose for the fifth straight day, tracking the rise in its Asian peers, said market participants. Foreign portfolio investor (FPI) inflows further aided the rupee.
However, the Reserve Bank of India (RBI) intervened in the foreign exchange market with dollar buys, which prevented further gains in the Indian currency.
“Indian rupee further extended its gain to 83.48 as inflows from various segments continued to hit the market, and the RBI’s presence was very small, just to curb the volatility with the dollar falling against most currencies. Exporters, bond inflows for today’s RBI auction, and inflows from corporates ensured that the rupee gains,” said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
Market participants said that the rupee is expected to trade with a positive bias, with strong resistance at the level of 83.55 per dollar.
“The rupee is in line with Asian peers; however, there is regulator intervention also. But that is not much. So, because other currencies are appreciating, the regulator also allowed a certain extent of appreciation,” said V R C Reddy, head of treasury at Karur Vysya Bank. “The RBI will continue with dollar buys, and technically, around Rs 83.55 a dollar, there is good support. The 83.50–83.55 range may be the near-term support for the dollar-rupee,” he added.
The dollar index fell to 100.50 after the US Federal Reserve’s decision to cut key interest rates by 50 basis points. After the US rate-setting panel’s decision, market participants expect the Reserve Bank of India’s Monetary Policy Committee to open up space for a rate cut with a change in stance in October.
In the current month so far, the rupee has appreciated by 0.37 per cent, while in the current calendar year, it has witnessed 0.4 per cent depreciation. In the current financial year, the rupee has depreciated by 0.2 per cent.
First Published: Sep 20 2024 | 7:23 PM IS