Rupee rises 22 paise to 89.45 against US dollar in early trade

Mumbai: The rupee appreciated 22 paise to 89.45 against the US dollar in early trade on Monday supported by foreign fund inflows and a positive trend in domestic equities.

Forex traders said corporate dollar inflows and Brent crude prices hovering near $60 per barrel supported investors sentiment further.

At the interbank foreign exchange market, the rupee opened at 89.53 against the US dollar, then gained some ground and touched 89.45 against the US dollar, registering a gain of 22 paise over its previous close.

On Friday, the rupee appreciated 53 paise to 89.67 against the US dollar.

The USD/INR pair has appreciated about 2 per cent from its recent lows, but it is still 5 per cent down on a year-on-year basis, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

"The broader depreciation trend remains intact despite the near term consolidation," Bhansali noted.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04 per cent higher at 98.63.

Brent crude, the global oil benchmark, was trading higher by 0.83 per cent at USD 60.97 per barrel in futures trade.

Reports highlight firm RBI intervention last week with heavy dollar selling via state-run banks lifting the rupee from its recent lows, Bhansali said.

The rupee’s rise could also indicate some tailwinds from the lower trade deficit during the month of November as also FPIs who have become buyers of Indian equity, Bhansali added.

On the domestic equity market front, the 30-share benchmark index Sensex was trading 210.57 points higher at 85,139.93, while the Nifty was up 154.80 points at 26,121.20.

Foreign Institutional Investors purchased equities worth Rs 1,830.89 crore on Friday, according to exchange data.

Meanwhile, India's forex reserves jumped by USD 1.689 billion to USD 688.949 billion during the week ended December 12, the Reserve Bank of India said on Friday. In the previous reporting week, the overall reserves increased by USD 1.033 billion to USD 687.26 billion.