Rupee rises 22 paise on likely RBI intervention despite oil surge

The rupee gained 22 paise against the US dollar in early trade, supported by likely RBI intervention and a softer dollar. However, elevated crude oil prices, FII outflows and weak domestic equities continued to weigh on the local currency

Mumbai: 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 a sustained slide in the domestic equity markets, kept pressure on the currency, forex traders said.

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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 a 13th consecutive night of strikes against Iran on Thursday as clashes escalated over shipping routes. The attacks came after Yemen’s Houthis said they had attacked two Saudi oil tankers in the Red Sea, potentially widening the Iran war as international oil prices crossed 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 throughout the session. RBI intervention through state-owned banks prevented a much larger depreciation, while the 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 lower by 0.01 per cent at 101.43.

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

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

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