Forex traders also cited suspected intervention by the Reserve Bank of India (RBI) in supporting the domestic currency. At the interbank foreign exchange market, the rupee opened strong at 89.46 and traded in a range of 89.05 to 89.50 during the day before settling at 89.16
India’s forex reserves rose by USD 5.543 billion to USD 692.576 billion during the week ended November 14. Representational pic
The Indian rupee rebounded sharply by 50 paise to close at 89.16 against the US dollar on Monday, aided by selling of the greenback by banks and importers, as well as a decline in global crude oil prices, news agency PTI reported. Forex traders also cited suspected intervention by the Reserve Bank of India (RBI) in supporting the domestic currency.
At the interbank foreign exchange market, the rupee opened strong at 89.46 and traded in a range of 89.05 to 89.50 during the day before settling at 89.16.
The domestic currency had tumbled 98 paise to hit a record low of 89.66 against the dollar on November 21, marking its steepest fall in over three years. The previous largest single-day decline was 99 paise on February 24, 2022.
“The rupee gained the most among Asian currencies on likely intervention from the central bank and MSCI index rebalancing-related flows. However, the trend and bias remain weak for the rupee amid foreign fund outflows, widening trade deficit, and a stronger dollar index against major currencies,” Dilip Parmar, research analyst at HDFC Securities, told PTI.
Brent crude, the global oil benchmark, slipped 0.78 per cent to USD 62.07 per barrel in futures trade, adding support to the domestic currency.
“The RBI opened the dollar lower at 89.15 by selling in NDF (non-deliverable forward) markets and kept it in a range of 89-89.30 for the day as the market was cautious of RBI intervention,” Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP told PTI.
The dollar index, which tracks the US currency against a basket of six major currencies, was marginally down 0.02 per cent at 100.15.
On the domestic equity front, the Sensex fell 331.21 points to 84,900.71, while the Nifty declined 108.65 points to 25,959.50. Foreign institutional investors (FIIs) were net sellers, offloading equities worth Rs 4,171.75 crore on Monday, according to exchange data.
Meanwhile, India’s forex reserves rose by USD 5.543 billion to USD 692.576 billion during the week ended November 14, driven largely by a sharp increase in the value of gold reserves, the RBI reported on Friday.
(With PTI inputs)
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