Mumbai, Dec 6 (PTI) The rupee appreciated 5 paise to close at 83.32 against the US dollar on Wednesday, helped by a bullish trend in domestic equities and lower crude oil prices.
Forex traders said elevated American currency in the overseas markets and dollar buying by the Reserve Bank of India (RBI) capped sharp gains for the local unit.
The rupee consolidated in a narrow range as investors remained on the sidelines ahead of the RBI’s monetary policy decision later this week.
“The Indian rupee snaps the two-day losing streak as foreign institutions turned net buyers with the surge in domestic equities. The announcement of the central bank’s likely to conduct a USD 600-800 million USD/INR swap on Tuesday and lower crude oil prices also supported the local rupee,” Dilip Parmar, Research Analyst, HDFC Securities, said.
At the interbank foreign exchange market, the local unit opened at 83.35 against the greenback.
The rupee oscillated between an intra-day low of 83.37 and a high of 83.29 against the greenback and finally settled at 83.32 against the dollar, higher by 5 paise from its previous close, even as domestic benchmark indices touched new lifetime peaks.
On Tuesday, the rupee settled at 83.37 against the dollar.
“We expect the rupee to trade with a slight negative bias on positive tone in the US Dollar and fresh foreign inflows. A weak tone in crude oil prices and positive domestic markets may also support the rupee.
“However, the RBI intervention may cap the sharp upside. Traders may take cues from US ADP Trade balance and non-farm employment change data. Investors may remain cautious ahead of RBI’s monetary policy decision on Friday,” said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.
The Reserve Bank is likely to maintain the status quo on the short-term interest rate in its monetary policy review.
RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) is scheduled to begin its three-day deliberations on December 6. Das will unveil the decision of the six-member MPC on December 8.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.07 per cent lower at 103.97.
Brent crude futures, the global oil benchmark, declined 0.38 per cent to USD 76.91 per barrel.
On the domestic equity market front, Sensex surged 357.59 points, or 0.52 per cent, to settle at its all-time high of 69,653.73 points. The Nifty advanced 82.60 points, or 0.4 per cent, to hit a record 20,937.70.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they sold shares worth Rs 79.88 crore, according to exchange data.
“…the pair has held the range of 83.20 to 83.50 for the past few sessions and is expected to consolidate ahead of the RBI monetary policy decision,” Parmar said. PTI DRR DRR BAL BAL
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