Rupee Gains 21 Paise to Settle at 93.77 Against US Dollar on Easing Crude and Strong Inflows
The Indian rupee appreciated by 21 paise to settle at 93.77 against the US dollar, tracking positive domestic cues, falling international crude oil prices, and sustained foreign fund inflows. The currency had closed at 93.98 in the previous session after registering a 43-paise surge.
In the interbank foreign exchange market, the local unit commenced trading at 93.85 against the greenback. Over the course of the session, the rupee traded within an intraday band, hitting a high of 93.69 and a low of 94.11 before ending at 93.77 against the American currency.
Key Catalysts Behind the Rupee's Movement
- Softening Crude Oil Prices: Declining energy costs reduced dollar demand from oil marketing companies, strengthening the domestic currency's trade balance outlook.
- Foreign Capital Inflows: Resilient inflows from foreign institutional investors provided continuous liquidity support in the currency markets.
- Geopolitical Optimism: Hopes of de-escalation in West Asia improved global risk appetite, tempering safe-haven bids for the dollar.
Despite the positive start, sharp gains were curbed later in the session due to state-run bank dollar purchases and renewed greenback demand.
Dilip Parmar, Senior Research Analyst at HDFC Securities, noted that the currency saw a technical retracement after its initial surge. "The Indian rupee registered a technical retracement, snapping a five-day winning streak amid state-run bank dollar buying ahead of a market holiday. The intraday correction followed morning gains catalysed by a soft dollar index, resilient foreign institutional inflows, and weaker crude oil pricing," Parmar said.
Forex traders pointed out that while stable crude prices and foreign inflows continue to offer tailwinds, the Reserve Bank of India's net short position in the forward market could act as a buffer against aggressive runaway appreciation. Market participants are now closely tracking upcoming US inflation data for clearer directional cues on global interest rate trajectories.
