Rupee rises 31 paise against dollar on falling crude prices

The rupee appreciated 31 paise to 94.24 against the US dollar in early trade on Thursday, supported by falling global crude oil prices, a weaker dollar index and positive domestic equity market sentiment. However, continued foreign institutional investor outflows limited further gains in the local currency

Mumbai: The rupee rose 31 paise to 94.24 against the US dollar in early trade on Thursday as global crude oil prices continued to decline and went below levels seen before the start of the West Asia conflict. A weaker greenback and positive sentiments in the domestic equity market further supported the local unit while heavy FII outflows prevented a sharper rise, forex traders said.

At the interbank foreign exchange market, the rupee opened at 94.30 against the US dollar and strengthened further to 94.24, up 31 paise from its previous close.

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The rupee appreciated 21 paise to settle at 94.55 against the US dollar on Wednesday. “The rupee opened stronger at 94.30 against the US dollar, supported by a sharp decline in global crude oil prices, which fell below levels seen before the Iran conflict. Brent crude is down more than 10 per cent this week and above 21 per cent for the month, easing concerns over India’s import bill and supporting the domestic currency,” Pinky Yadav, Commodity Fundamental Analyst at Choice Broking, said.

“However, gains in the rupee remained capped as the US dollar hovered near a one-year high around 101.5 amid expectations that the Federal Reserve could maintain a tighter monetary stance,” Yadav said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.50, lower by 0.10 per cent.

Brent crude, the global oil benchmark, was trading lower by 1.72 per cent at USD 72.47 per barrel in futures trade. On the domestic equity market front, Sensex climbed 440.23 points to 77,435.76 in early trade, while the Nifty rallied 137.80 points to 24,147.60.

Foreign institutional investors offloaded equities worth Rs 1,843.40 crore on a net basis on Wednesday, according to exchange data.