Rupee Jumps The Most In Three Weeks
Rising for the third straight day, the rupee strengthened by 55 paise to settle at 73.57 against the U.S. dollar in trade today. This was the domestic currency’s biggest gain in over three weeks as global crude prices eased and domestic indices staged a rebound.
Steps taken by the government to curb non-essential imports and anticipation of more measures to attract foreign inflows have boosted sentiment in the market, traders said.
The government on Thursday hiked the import duty on certain communication items, including base stations, to up to 20 percent as part of efforts to check a widening current account deficit, and to shore up the rupee.
The currency’s 55 paise gain is its biggest surge since Sept.19, when it had jumped 61 paise.
At the Interbank Foreign Exchange, the rupee opened on a strong note at 73.84 from Thursday's closing of 74.12 per dollar. It gained further ground to hit a high of 73.52 against the U.S. dollar, driven by selling of the greenback by exporters and banks and easing crude oil prices.
According to Rohit Srivastava, Fund Manager PMS, Sharekhan by BNP Paribas, there is "expectations that the government will take action on the weak rupee”.
Foreign exchange dealers said the bullish trend in the equity market as well as easing crude oil prices also supported the rupee's upward movement.
Brent crude traded at $80.65 per barrel.
The International Energy Agency today revised lower its growth forecast for global oil demand for 2018 and 2019, citing high prices, trade tensions and a less favourable economic outlook.
Meanwhile, the BSE Sensex today posted its biggest single-day gain in 19 months, soaring over 700 points, as global markets rebounded after two straight sessions of losses. The BSE Sensex settled up by 732.43 points, or 2.15 percent, at 34,733.58. The broader Nifty ended the week at 10,472.50, up 237.85 points, or 2.32 percent. Foreign investors net sold shares worth Rs 1,322.13 crore in trade on Friday, provisional data showed.