Rupee Extends Recovery, Closes Higher Against U.S. Dollar
NEW DELHI — The Indian rupee strengthened for a second consecutive trading session Friday, rising 63 paise to close provisionally at 95.73 against the U.S. dollar.
The currency was supported by easing crude oil prices, positive sentiment in Indian equity markets and expectations that the Reserve Bank of India would continue intervening to limit excessive volatility.
The rupee opened at 96.30 against the dollar in the interbank foreign exchange market and gained sharply during the session. It touched an intraday high of 95.30 and a low of 95.68 before settling at 95.73.
The gain followed a 50-paise rebound Thursday, when the rupee recovered from a record closing low to end at 96.36 against the dollar.
“This recovery is largely attributed to the Reserve Bank of India’s active intervention following its USD/INR buy-sell swap announcement, along with easing geopolitical tensions that have softened imported commodity prices,” an analyst said.
Foreign exchange market participants said sentiment improved after U.S. Secretary of State Marco Rubio suggested diplomatic efforts related to Iran were moving in a constructive direction. The remarks helped ease concerns about possible disruptions in global energy markets, offering relief to emerging-market currencies, including the rupee.
The rupee also benefited from a decline in U.S. Treasury yields and gains in Indian equities.
Indian benchmark stock indexes ended higher, with the Sensex rising 231.99 points to close at 75,415.35 and the Nifty advancing 64.60 points to settle at 23,719.30.
Analysts cautioned, however, that geopolitical developments remain a key risk for the currency.
“For now, the near-term trend has turned supportive for the rupee, with RBI intervention continuing to play a key role in controlling volatility and restoring confidence in the forex market,” an analyst said.
“Rupee range is expected between 95.00–95.90 in the near term,” the analyst added. (Source: IANS)
