Rupee Logs First Gain In Five Sessions, Rises 20 Paise Against U.S. Dollar
The Indian rupee reversed its four-day losing streak by recovering 20 paise to close at 71.04 against the U.S. dollar on Thursday on increased selling of the greenback by exporters and lower crude oil prices.
Besides, liquidity infusion by the central bank through open market operations and unveiling of Reserve Bank of India’s new policy for overseas borrowings, allowing all eligible entities to raise foreign funding under the automatic route and removing sectoral curbs, supported the rupee.
At the Interbank Foreign Exchange, the rupee opened stronger at 71.10 a dollar against the previous close of 71.24. The local unit moved in a range of 70.98 to 71.41, before finally ending at 71.04, showing a gain of 20 paise.
"Central bank eased overseas borrowing rules for companies, which also helped rupee to recover from the lower levels," said V K Sharma, head PCG and Capital Markets Strategy, HDFC Securities.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.01 percent at 96.04.
Furthermore, losses in crude oil and gains in domestic equities also supported the trading sentiment in the forex market.
Brent crude, the global benchmark, was trading at $60.56 per barrel, lower by 1.24 percent.
"The Brent crude rally halted today on the face of strongly rising crude oil production coming out of the U.S. The news on Brent reflected in the INR movement which rose after depreciating for four straight days. The rupee was among the top five best performing EM currencies today," said Sunil Sharma, chief investment officer, Sanctum Wealth Management.
Meanwhile, foreign funds sold shares worth Rs 90.10 crore on a net basis on Wednesday, while domestic institutional investors were net buyers to the tune of Rs 304.27 crore, provisional data showed.
Benchmark indices closed higher for the third straight session on Thursday. The BSE Sensex settled 52.79 points, or 0.15 percent, higher at 36,374.08. The broader NSE Nifty inched up 14.90 points, or 0.14 percent, to 10,905.20.