Snapping a four-session downturn, the rupee appreciated by 23 paise to end 71.11 against the US dollar on Wednesday amid easing oil prices and a firm greenback.
At the Interbank Foreign Exchange (forex) market, the domestic unit opened strong at 71.29 but surrendered the gains to slip to a low of 71.34. However, it clawed back lost ground and finally ended at 71.11, up 23 paise. The rupee had closed at 71.34 versus the greenback on Monday. Money markets were closed on Tuesday on account of Chhatrapati Shivaji Jayanti.
“Rupee has broken the four days’ losing streak by appreciating 23 paise against the dollar. All the Asian equity markets closed on a strong wicket today, amid continued optimism that upcoming round of talks between the US and Chinese officials will take the two nations closer toward achieving a trade deal in the foreseeable future. The US dollar Index was capped against its peers today on falling US yields and before the Federal Reserve’s policy meeting minutes, scheduled today. The benchmark 10-year US Treasury yield fell sharply to 2.628, the lowest level since 3rd Jan 2019.
“The Reserve Bank of India (RBI) in its board meeting decided to transfer Rs 28,000 crore as interim dividend to the government for the period of July to December 2018. The dividend transfer will help the Centre meet its revised fiscal deficit target of 3.4 per cent of gross domestic product for FY19. With this surplus transfer, the total dividend payout by the RBI to the government in FY19 stands at Rs 68,000 crore. Lower fiscal deficit would provide floor to the indian currency,” said VK Sharma, head PCG and Capital Markets Strategy, HDFC Securities.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, inched up 0.04% to 96.56.