Indian rupee strengthened by 29 paise to 94.62 against the US dollar in early trade on Wednesday, supported by foreign inflows from the Jio IPO and Reserve Bank of India backing. However, elevated crude oil prices and a firm greenback capped further gains.
Key Points
- The rupee appreciated 29 paise to 94.62 against the US dollar in early trade.
- Foreign dollar inflows from the Jio IPO and RBI support boosted the rupee’s strength.
- Elevated crude oil prices and a firm US dollar capped further gains for the domestic currency.
- Analysts predict the rupee will consolidate within a 94.00 to 94.75 trading band.
- Foreign Institutional Investors (FIIs) sold equities worth Rs 1,148.64 crore on Monday.
Mumbai, October 21 — The rupee gained 29 paise to 94.62 against the US dollar in early Wednesday trade, backed by positive domestic market sentiment and RBI support. In addition to the Jio IPO-driven dollar inflows, the currency received further support from central bank intervention.
Nevertheless, persistently high crude oil prices and a strong US dollar limited the rupee’s upside.
At the interbank foreign exchange market, the rupee opened at 94.78 and advanced to 94.62, registering a 29-paise gain from its previous close of 94.91.
The foreign exchange market was closed on Tuesday due to the Dussehra holiday.
Commenting on the trend, Aamir Makda, Commodity & Currency Analyst at Choice Broking, noted: “This strength is primarily underpinned by foreign dollar inflows tied to the Jio IPO alongside support from the Reserve Bank of India (RBI). To navigate dollar flows during the IPO allotment process, foreign investors are largely relying on sell/buy swaps — offloading dollars for rupees in the spot market while contracting to repurchase them within a short window, usually under a week.”
Despite these positive drivers, elevated oil prices remain a significant headwind for the domestic currency, he added.
Makda observed that “over the course of today’s session, the rupee is expected to consolidate within a trading band of 94.00 to 94.75 against the dollar.”
The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading at 101.58, up marginally by 0.06 per cent.
Brent crude, the global oil benchmark, was trading up 1.42 per cent at USD 110.33 per barrel in futures trade.
In the domestic equity market, the Sensex climbed 665.10 points to 74,518, while the Nifty rose 188.40 points to 23,077.35.
According to exchange data, Foreign Institutional Investors (FIIs) sold equities worth Rs 1,148.64 crore on a net basis on Monday.