On May 17, the rupee touched 83.37 against the US dollar. | Photo credit: The Hindu
The rupee strengthened by six paise to close at 83.31 against the US dollar on May 21 on the back of a tender dollar against major foreign currencies and weakening crude oil prices in international markets.
“However, the sluggish trend in domestic stock markets has restricted the local currency’s surge,” forex traders said.
At the interbank forex market, the local unit opened strongly at 83.32 and touched an intraday high of 83.26 and low of 83.36. The domestic unit finally settled at 83.31 (provisional), up six paise from the previous close. On May 17, the rupee touched 83.37 against the US dollar.
The forex market was closed on May 20 for the general election. “A fall in crude oil prices and fresh foreign inflows also supported the rupee. “The US dollar weakened on Fed interest rate cut expectations, but hawkish comments from Fed officials supported the US dollar at lower levels,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas – said.
In the domestic equity market, the 30-share BSE Sensex fell 52.63 points or 0.07% to end at 73,953.31, while the broader NSE Nifty rose 27.05 points or 0.12% to 22,529 .05.
“The rupee has been trading positively. This strength is attributed to predictions that the incumbent government will win the general election, which will lead to greater stability.
“Additionally, domestic institutional investors (DIIs) are actively buying capital markets. Pliable crude oil prices and stable dollar index also supported the rupee. The expected range for the rupee rate for the coming sessions is between 83.00 and 83.50,” Jateen Trivedi, said VP Research – Commodities and Currency at LKP Securities.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Saturday, selling shares worth ₹ 92.95 crore, according to stock exchange data.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, fell 0.07% to 104.38. Brent crude futures, the global crude oil benchmark, fell 0.97% to $82.90 a barrel.
