Kumar Bahukhandi
Rupee Starts the Week Stronger: The Indian rupee gained 24 paise to 95.72 against the US dollar in early trade on Monday, supported by softer crude oil prices, positive domestic equities and improved foreign fund sentiment, while importer demand for dollars limited further gains. (Representational Image)
Softer crude oil prices, gains in domestic equities and improved foreign fund sentiment support the Indian currency, though importer demand for dollars limits the advance
Key Highlights
- Rupee strengthens 24 paise to 95.72 per US dollar in early Monday trade.
- Currency opened at 95.86, compared with Friday’s close of 95.96.
- Brent crude futures fall 2.10% to $101.69 per barrel.
- Positive domestic equities and improved foreign fund sentiment support the rupee.
- Oil importers’ dollar demand and a stronger US Dollar Index restrict further gains.
- FIIs were net buyers of ₹599.54 crore in Indian equities on Friday.
The Indian rupee strengthened by 24 paise to 95.72 against the US dollar in early trade on Monday, supported by a moderation in global crude oil prices and a positive opening in domestic equity markets.
At the interbank foreign exchange market, the rupee opened at 95.86 against the dollar before gaining further to touch 95.72, compared with its previous close of 95.96 on Friday.
The early recovery came as crude oil prices eased after a volatile previous week, offering some relief to the domestic currency. Brent crude futures were trading 2.10 per cent lower at $101.69 a barrel during the morning session.
Equities and Foreign Fund Flows Offer Support
Positive sentiment in the domestic equity market also supported the rupee. The Sensex jumped 448.32 points to 74,743.28 in early trade, while the Nifty gained 50.30 points to 23,396.70. Foreign institutional investors were net buyers of Indian equities worth ₹599.54 crore on Friday, according to exchange data cited in the market report.
However, the rupee’s advance remained under pressure from continued demand for US dollars from oil-importing companies and strength in the American currency.
The US Dollar Index, which measures the greenback against a basket of six major currencies, was trading 0.09 per cent higher at 100.31.
Crude Prices Remain a Key Factor
The movement in global crude prices remains particularly important for the rupee because changes in oil costs affect India’s demand for foreign currency to finance imports.
After Brent crude climbed sharply during the previous week, easing concerns over Saudi supply disruptions contributed to a pullback in prices. The softer crude market provided some breathing room for the rupee at the beginning of the new trading week.
India’s foreign exchange reserves, meanwhile, declined by $4.924 billion to $780.782 billion during the week ended September 11 following a fall in foreign-currency assets and gold reserves, according to RBI data cited in the report.
