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Rupee rises 4 paise to 83.06 against US dollar in early trade

At the interbank foreign exchange market, the local unit opened at 83.08 and gained further ground to trade at 83.06 against the greenback, registering a gain of 4 paise from its previous closing level.
Last Updated : 27 May 2024, 03:55 IST
Last Updated : 27 May 2024, 03:55 IST

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Mumbai: The rupee appreciated by 4 paise to 83.06 against the US dollar on Monday, tracking a positive trend in domestic equities, wherein benchmark indices scaled new peaks.

Forex traders said the weakness of the American currency in the overseas market supported the rupee, while elevated crude oil prices in the international market restricted the upmove.

At the interbank foreign exchange market, the local unit opened at 83.08 and gained further ground to trade at 83.06 against the greenback, registering a gain of 4 paise from its previous closing level.

On Friday, the rupee rallied for the fourth consecutive trading session and settled with a sharp gain of 19 paise at 83.10 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.70, lower by 0.02 per cent.

Brent crude futures, the global oil benchmark, advanced 0.19 per cent to $82.28 per barrel.

On the domestic macroeconomic front, India's forex reserves jumped $4.549 billion to a new all-time high of $648.7 billion for the week ended May 17, the Reserve Bank said on Friday.

This is the third consecutive week of increase in the overall kitty, which had increased by $2.561 billion to $644.151 billion in the previous reporting week ended May 17.

"India's robust economic fundamentals and significant foreign exchange reserves, which reached an all-time high of $648.7 billion as of May 17, provide a solid buffer for the RBI to counter any downward pressure on the rupee," CR Forex Advisors MD Amit Pabari said.

Additionally, substantial foreign direct investment (FDI) inflows are anticipated. The Adani Group is planning to raise $3.5 billion through a Qualified Institutional Placement (QIP), while Torrent Pharma aims to secure $0.60 billion through convertible bonds or debentures, Pabari added.

"Given these factors, the rupee is expected to appreciate to around 82.80–82.50 in the near-term, with medium-term projections ranging between 82.20 and 82.00," Pabari said.

On the domestic equity market, both the benchmark indices scaled new peaks. The 30-share BSE Sensex was trading 168.04 points, or 0.22 per cent higher at 75,578.43 points. The broader NSE Nifty advanced 47.25 points or 0.21 per cent to 23,004.35 points in initial trade.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth Rs 944.83 crore, according to exchange data.

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Published 27 May 2024, 03:55 IST

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