Rupee recovers slightly, rises 22 paise to 96.51 against US dollar

Representational Image. File pic.

The rupee rose 22 paise to 96.51 against the US dollar in early trade on Friday on likely RBI intervention to stem its further slide after global crude oil prices crossed the USD 100-mark owing to heightened tensions in West Asia.

A softer greenback provided mild support to the local unit while FII outflows, coupled with sustained slide in the domestic equity markets, maintained pressure, forex traders said.

At the interbank foreign exchange, the rupee opened weaker at 96.81 before rising to 96.51, up 22 paise from its previous close.

The rupee ended 20 paise weaker at 96.73 against the US dollar on Thursday.

The US military announced 13th night of strikes on Thursday against Iran as clashes escalate over shipping routes. The attacks came after Yemen's Houthi said they attacked two Saudi oil tankers in the Red Sea, potentially widening the Iran war as international oil topped USD 100 a barrel.

"The key factors for the weak opening of the rupee were -- Brent crude oil remained elevated, increasing dollar demand from Indian oil marketing companies while importer dollar buying remained strong through the session. RBI intervention via state-owned banks prevented a much larger depreciation, while softer dollar index provided only limited support," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading marginally down by 0.01 per cent at 101.43.

Brent crude, the global oil benchmark, crossed the USD 100-mark, trading 0.12 per cent higher at USD 100.8 per barrel in futures trade.

On the domestic equity market front, Sensex opened weaker for the fifth day in a row, tumbling 512.07 points to 75,869.38 in early trade while the Nifty was down 153 points to 23,713.60.

Foreign Institutional Investors offloaded equities worth Rs 2,999.23 crore on a net basis on Thursday, according to exchange data.

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