Rupee recovers 17 paise to close at 76.03 on forex inflows

The rupee on Monday appreciated by 17 paise to close at 76.03 against the US dollar in line with positive equity markets amid sustained foreign fund inflows. Weak US dollar against major global currencies also aided the rupee's upward movement, forex dealers said.

At the interbank foreign exchange market, the rupee opened strong at 76.16 and it further rushed to touch a high of 75.98 during the trade. The domestic currency finally settled at 76.03 against the US dollar, registering a rise of 17 paise over its previous close of 76.20.

"Rupee traded strong likely on the back of FII buying in local stocks, mainly banking and NBFCs, helping the rupee scale towards 76.00 after touching a low of 76.19 in morning opening trades," Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities said.

Foreign institutional investors were net buyers in the capital market, as they bought equity shares worth Rs 1,237 crore in the previous trading session on Friday, according to provisional exchange data. The BSE benchmark Sensex surged 179.59 points, or 0.52 per cent, to end at 34,911.32.

The NSE Nifty too rose 66.80 points, or 0.65 per cent, to close at 10,311.20. The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.31 per cent to 97.31. Brent crude futures rose 0.21 per cent to USD 42.28 per barrel.

"India’s rupee rises on foreign inflows into the domestic stocks, with dollar sales by exporters also providing support to the domestic currency.

Apart from the record forex reserves, expectation of MSCI rebalancing related inflows in domestic equity market supported rupee," Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities said.