FII inflow rallies Re to sub-70 level

FII inflow rallies Re to sub-70 level

This is the second successive session of gain for the domestic currency, during which it has climbed 64 paise.

The Indian rupee has closed at the sub-70 level for the first time in past two months on the back of continuous inflow of foreign funds into the domestic equity markets.

The rupee ended the day's trade at 69.99 against US dollar, up 29 paise from Wednesday's close of 70.28.

At the Interbank Foreign Exchange (forex) market, the rupee opened on a positive note at 69.98. Intra-day, it fluctuated between 69.96 and 70.03, before finally closing at 69.99.

The last time rupee closed below 70-mark against US dollar was on January 7, 2019, when it closed at 69.80. 

This is the third successive session of gain for the domestic currency, during which it has climbed 93 paise.

Analysts attribute the phenomenon to the increased flow of FIIs after US Federal Reserve stating that it will plug hiking the interest rate and the stability in wake of increased chances of Prime Minister Narendra Modi returning to power in this general elections.

“I would have expected rupee to depreciate after the US decision to impose tariffs on various good. However, only logical reason behind this is the FII inflows,” Madan Sabnavis, Chief Economist at the Care Ratings said.

US President Donald Trump, on Monday, announced the plan to end preferential trade treatment for India that allows duty-free entry for $5.6 billion worth of the country’s exports to the United States.

Even as the domestic institutional investors continue to exit Indian equity markets, foreign institutional investors parked Rs 1,137.85 crore in the Indian debt and equity markets on Thursday. This follows the net of Rs 1,130.78 crore deposited by the FIIs on Wednesday. In the month of March, foreign investors have parked a net amount in excess of Rs 3,000 crore.

Even as the rising crude oil prices put the pressure on the rupee value, according to the Forex dealers, selling of the greenback by exporters supported the rupee.

Brent crude, the global oil benchmark, was trading at $66.89 per barrel, up by 0.90 cents (1.36%) from Wednesday's close of $65.95 a barrel, at the time of filing this copy.