A robust trend in local equities contributed to the rupee’s increase by 5 paise hitting to 83.39 against the US dollar in early trade on April 22. Forex dealers reported that as the US dollar and crude oil prices dropped from their high points, the local currency gained momentum. The opening price of the local currency against the US dollar in the interbank foreign exchange market was 83.40.
Later, while trading, it reached 83.39, up by 5 paise from the previous close. The rupee gained 8 paise versus the US dollar on Friday, closing at 83.44. Forex traders guess that the local unit’s retreat was probably caused by some intervention on the part of the Reserve Bank of India.
“The Indian forex reserves fell to USD 643.162 billion after rising for 7 weeks in succession, as the Reserve Bank of India (RBI) would have sold dollars to rein in the rupee,” said Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP.
As for India, the Reserve Bank officials said on Friday that the country’s foreign exchange reserves fell by $5.401 billion to $643.162 billion for the week that ended on April 12. The prior reporting week saw a $2.88 billion gain in total reserves, reaching a new high of $648.562 billion. Bhansali said, “The RBI will be present to keep a tab over the depreciation while oil companies and FPIs buy dollars.”
The dollar index, which measures the strength of the US dollar against a basket of six other currencies, was down 0.07% to 106.07 in the meantime. The benchmark for global oil, Brent crude futures, dropped 0.76% to $86.63 a barrel. The 30-share BSE Sensex increased 295.86 points, or 0.40%, to 73,384.19 in early activity on the front of the local equity market. To reach 22,253.00, the NSE Nifty increased by 106.00 points, or 0.48%.
The Foreign Institutional Investors (FIIs) were the buyers in the markets on Friday, as the invested amount was 129.39 crore, which may affect the rupee in future trade.
