The Indian rupee ended 26 paise higher against the US dollar on Friday amid a pullback in the greenback and US treasury yields and and likely intervention by the Reserve Bank of India (RBI). The local currency ended at 82.95 a dollar as compared to previous close of 83.21.
Gains in domestic equities and the RBI’s announcement of the discontinuation of incremental cash reserve ratio (I-CRR) in a phased manner by October 7, also supported the local unit.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.04% to 105.01.
For the week, the rupee depreciated by 0.27% against the US dollar, registering weekly decline for the second consecutive.
On Thursday, the rupee depreciated 9 paise to end at its record closing low of 83.21 a dollar.
The rupee appreciated as the RBI discontinued the I-CRR in a phased manner by October 7, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Choudhary added that reports of the RBI intervention in the forex markets to protect the rupee ahead of the G20 meeting also supported the domestic currency.
Read here: RBI to discontinue incremental cash reserve ratio in a phased manner
“We expect the rupee to trade with a slight positive bias on positive domestic equities and intervention by the RBI. However, overall strong dollar and elevated crude oil prices may cap the upside. Traders may take a cautious approach ahead of US CPI inflation next week, which is expected to remain higher,” Choudhary added.
He expects USD/INR spot price to trade in a range of ₹82.40 to ₹83.50.
Meanwhile, crude oil prices rose, capping gains in the rupee.
Brent crude futures rallied 0.54% to $90.41 a barrel, while US West Texas Intermediate crude (WTI) gained 0.46% to $87.27.
On the domestic front, the Indian stock market indices, ended higher for the sixth consecutive session on Friday led by gains in banking and financial stocks.
The Sensex rallied 333.35 points, or 0.50%, to close at 66,598.91, while the Nifty settled 92.90 points, or 0.47%, higher at 19,819.95.
On Thursday, the Foreign institutional investors (FIIs) net sold Indian shares worth ₹758.55 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹28.11 crore, as per provisional data available on the exchanges.
(With PTI Inputs)
