Rupee rises for sixth straight session, closes at 94.92 against dollar

The rupee rose 7 paise to close at 94.92 against the US dollar on Friday, extending gains for a sixth session. RBI measures supported the currency, while crude prices and foreign fund outflows limited gains, according to forex market traders

Mumbai: The rupee extended its gains for the sixth consecutive session on Friday, settling 7 paise higher at 94.92 (provisional) against the US dollar, supported by Reserve Bank of India (RBI) measures to curb spot dollar demand.

However, elevated crude oil prices and foreign fund outflows capped the currency’s gains, according to forex traders.

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At the interbank foreign exchange market, the rupee opened at 94.75 against the US dollar. During intraday trade, it touched a high of 94.71 and a low of 95.06 before settling at 94.92 (provisional), up 7 paise from the previous close.

On Thursday, the rupee had appreciated 18 paise to close at 94.99 against the US dollar.

“The rupee is now approaching a crucial support zone around 94. Persistent pressure from elevated crude oil prices, rising US Treasury yields and continued foreign equity outflows had prompted the RBI to intensify its intervention to limit the impact of currency weakness on domestic inflation and broader financial stability,” said Kaveri More, commodity technical analyst at Choice Broking.

The RBI has reportedly deployed around USD 75-80 billion through spot dollar sales and dollar-rupee swaps since its special measures to attract foreign currency inflows came into effect on June 8, More said.

“Going forward, the rupee’s near-term direction will depend on the effectiveness of RBI intervention, movements in crude oil prices and US bond yields, and the pace of foreign investor flows. While continued central bank support may help stabilise the currency, sustained external pressures could limit further appreciation,” More said.

The dollar index, which measures the US currency’s strength against a basket of six currencies, was trading 0.41 per cent lower at 101.445.

Brent crude, the global oil benchmark, was trading 0.34 per cent lower at USD 105.56 per barrel in futures trade.

On the domestic equity market, the Sensex climbed 413.66 points to settle at 74,729.27, while the Nifty rose 148.80 points to close at 23,146.15.

Foreign Institutional Investors (FIIs) sold equities worth Rs 5,285.37 crore on a net basis on Thursday, according to exchange data.