Rupee gains for fifth straight session, rises 14 paise to 94.59

The rupee gained 14 paise to close at 94.59 against the US dollar on Thursday, extending its winning streak to five sessions. Strong foreign currency deposit inflows and foreign institutional buying supported the currency, while crude prices capped gains

Mumbai: The rupee extended its gaining momentum for the fifth straight session on Thursday, appreciating 14 paise to close at 94.59 (provisional) against the US dollar, buoyed by improved balance of payments conditions following higher-than-expected foreign currency deposits.

India mobilised a record USD 127.23 billion through FCNR(B), or foreign currency non-resident (bank) deposits, under a special central bank programme aimed at bolstering the country’s foreign exchange liquidity.

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Including overseas foreign currency borrowings (OFCB) and external commercial borrowings (ECB), total inflows under the measures reached USD 136.377 billion, according to RBI data.

At the interbank foreign exchange market, the rupee opened at 94.30 and touched an intraday high of 94.26 and a low of 94.59 during the session.

At the end of Thursday’s trading session, the rupee was quoted at 94.59 (provisional), higher by 14 paise from its previous close.

On Wednesday, the rupee settled at 94.73, recording a gain of 22 paise.

The local unit gained 27 paise to settle at 94.95 against the US dollar on Tuesday, after rising 21 paise and two paise in the preceding two sessions on Monday and Friday, respectively.

“Indian rupee rose sharply amid huge FCNR deposit inflows and FII buying. Softening of the US dollar and US Treasury yields amid sharp appreciation in the yen also supported the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

Choudhary said the rupee is expected to trade with a positive bias on optimism over rising foreign inflows, increased risk appetite in global markets and a softening US dollar.

“However, elevated crude oil prices and any fresh escalation of tensions between the US and Iran may cap sharp upside. Traders may take cues from trade balance, weekly unemployment claims and ISM services PMI data from the US,” Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.22, marginally lower by 0.38 per cent on safe-haven demand amid renewed US-Iran tensions.

Brent crude, the global oil benchmark, was trading higher by 0.85 per cent at USD 96.44 per barrel in futures trade, on escalating US-Iran tensions and fears of disruption to oil flows through the Strait of Hormuz.

On the domestic equities market front, the Sensex dropped 417.49 points to settle at 76,152.86, while the Nifty fell 41 points to 23,873.45.

Foreign institutional investors purchased equities worth Rs 6,688.37 crore on a net basis on Wednesday, according to exchange data.