Forex traders said the crude oil level of $69 per barrel will act as a support for the domestic unit as India, the world’s third-largest oil importer, stands to benefit from cheaper oil.
| Photo Credit: The Hindu

The rupee traded in a narrow range on Wednesday (September 11, 2024) and appreciated 2 paise to 83.96 against the American currency, on easing crude oil prices and tracking its Asian peers.

Forex traders said foreign institutional inflows, alongside significant corrections in asset classes like the dollar index and crude oil prices, supported the rupee, while the Reserve Bank’s active intervention kept the rupee in a tight range.

At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.97 against the American currency and was at 83.96 in initial trade, registering a rise of 2 paise over its previous close.

On Tuesday (September 10, 2024), the rupee depreciated 3 paise to close at 83.98 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.21% to 101.42 points.

Brent crude, the international benchmark, was trading higher by 0.48% to $69.52 per barrel in futures trade.

Forex traders said the crude oil level of $69 per barrel will act as a support for the domestic unit as India, the world’s third-largest oil importer, stands to benefit from cheaper oil.

“The Indian rupee cannot remain in such a state for long as fundamentals clearly indicated gains for rupee with a fall in oil prices, good economic fundamentals, rise in Asian currencies and rising interest differentials should allow RBI to allow the rise in rupee,” Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Bhansali further said that over a longer term, 83.97 looks to be a good selling level for exporters despite a higher Real Effective Exchange Rate (REER), which the Reserve Bank may have to ignore for the moment. For the day, 83.90 to 84.05 should be the range.

On the domestic equity market, the 30-share BSE Sensex declined 104.25 points, or 0.13%, to 81,817.04, while the Nifty was down 33.05 points, or 0.13%, to 25,008.05.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth ₹2,208.23 crore, according to exchange data.

Image for representational purposes only.
| Photo Credit: REUTERS

The rupee traded in a narrow range on Tuesday (September 10, 2024) and depreciated 2 paise to close at 83.97 (provisional) against the American currency, weighed down by the strengthening of the American currency in the overseas market.

Forex traders said the U.S. dollar recovered amid mixed non-farm payrolls data. The slight recovery in crude oil prices also weighed on the rupee. However, a surge in the domestic markets cushioned the downside.

At the interbank foreign exchange market, the local unit opened at 83.95 against the American currency and finally settled at 83.97 (provisional) against the U.S. dollar, down 2 paise from its previous close.

On Monday (September 9, 2024), the rupee traded in a narrow range and closed flat at 83.95 against the American currency.

“We expect the rupee to trade with a slight negative bias on the strong US dollar and concerns over global economic growth. However, positive domestic markets and any intervention by the Reserve Bank of India (RBI) may support the rupee at lower levels,” Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

Mr. Choudhary further noted that “investors may remain cautious ahead of the U.S. CPI and ECB monetary policy this week. “USDINR spot price is expected to trade in a range of 83.70 to 84.20,” he said.

On the domestic equity markets front, the Sensex climbed 361.75 points, or 0.44%, to settle at 81,921.29 points, while the Nifty rose 104.70 points, or 0.42%, to close at 25,041.10 points.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.03% to 101.58.

Brent crude, the international benchmark, fell 1.16% to 71.01 in futures trade.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday, as they purchased shares worth ₹1,176.55 crore, according to exchange data.