Rupee rises 10 paise to settle at 93.23 against US dollar
The rupee strengthened by 10 paise to settle at 93.23 (provisional) against the US dollar on Thursday, following a decline in global crude oil prices amid hopes of a truce in West Asia.
However, sustained outflow of foreign capital amid increased dollar demand from importers capped the gain in the local currency, forex traders said, adding that the domestic unit rose after crude oil prices hovered around $95-a-barrel.
At the interbank foreign exchange market, the rupee opened at 93.29 and touched an intraday high of 93.16 against the greenback. It also fell to the day’s low of 93.35 before ending the session at 93.23 (provisional) against the dollar, registering a rise of 10 paise from the previous closing level.
On Wednesday, the rupee gained 2 paise to settle at 93.33 against the US dollar.
Jateen Trivedi, VP Research Analyst — Commodity and Currency, LKP Securities, said the rupee’s gains are largely driven by de-escalation hopes between the US and Iran, which have led to a decline in crude oil prices over the last 48 hours, easing pressure on India’s import bill.
“However, the recovery remains fragile, as markets continue to track geopolitical developments closely, and any reversal in crude could quickly impact the rupee. The rupee range can be seen between 92.75-93.75,” Trivedi said. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, surged by 0.18 per cent at 98.03.
Brent crude, the global oil benchmark, was trading up 1.65 per cent at $96.50 per barrel in futures trade. Crude oil prices fell below $100/barrel amid expectations that the crisis in West Asia would end soon.
In a latest development on the geopolitical front, China, a close ally of Iran and the largest importer of Iranian oil, has asked Tehran to ensure freedom and safe passage through the Strait of Hormuz, the key international trade route.
On the domestic equity market front, the 30-share Sensex fell 122.56 points, or 0.16 per cent, to settle Thursday’s session at 77,988.68, while the Nifty slipped 34.55 points, or 0.14 per cent, to 24,196.75.
Foreign Institutional Investors were net sellers on Wednesday and offloaded equities worth Rs 666.15 crore, according to exchange data.
On the microeconomic front, government data released on Wednesday showed that the Wholesale Price Index (WPI)-based inflation rose sharply to an over 3-year high of 3.88 per cent in March, driven by a sharp spike in rates of fuel, power and manufactured items amid the West Asia crisis.
Consumer price index-based retail inflation rose 3.4 per cent in March compared to 3.21 per cent in the preceding month, mainly due to an uptick in certain food items, data released earlier this week showed.
