Mumbai, March 5
The rupee rebounded from its lowest level and settled with a gain of 45 paise at 91.60 (provisional) against US dollar on Thursday on the back of a buying trend in domestic equity markets and reports of Reserve Bank intervention.
According to forex analysts, the Reserve Bank seems to have intervened to help the local currency from extreme volatility due to uncertainties on the ongoing war involving the US, Israel and Iran.
However, a firm dollar, rising crude oil prices and intense withdrawal of foreign funds kept the rupee under pressure, they said.
At the interbank foreign exchange, the rupee opened at 92.16 and touched an intraday high of 91.30 against the greenback. The currency ended the session at 91.60 (provisional) against the dollar, registering a gain of 45 paise from the previous closing level.
The Indian currency slumped 56 paise to close at its all-time low of 92.05 against US dollar on Wednesday, after logging a steep loss of 41 paise on Monday. The forex market was closed on Tuesday on account of Holi.
Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said the rupee bounced back from record low levels on reports of intervention by the Reserve Bank of India and positive tone in the domestic markets. However, a strong dollar and surge in crude oil prices capped sharp gains.
“FII outflows and rising crude oil prices may also weigh on the rupee. However, any RBI intervention may support rupee at lower levels. Traders may also take cues from weekly unemployment claims data from the US. USD-INR spot price is expected to trade in a range of Rs 91.30 to Rs 92.10,” Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13 per cent higher at 98.86.
Brent crude, the global oil benchmark, was up 1.83 per cent at 82.89 per barrel in futures trade, after escalating threats of disruptions in the flow of crude through the Strait of Hormuz.
The military conflict involving the US, Israel and Iran continued on Thursday as Iranian missiles hit Israel after an American submarine sank an Iranian warship on Wednesday. Iran has also threatened the destruction of military and economic infrastructure across the region.
According to experts, India faces the risk of a sharp increase in its import bill with the rising crude prices in the international market, as the country’s 85 per cent fuel requirement is met through imports.
On the domestic equity market front, the Sensex saw a sharp recovery of 899.71 points or 1.14 per cent to settle at 80,015.90, while Nifty recovered 285.40 points or 1.17 per cent to 24,765.90.
Foreign institutional investors sold equities worth Rs 8,752.65 crore on a net basis on Wednesday, according to exchange data.
PTI
