Noida, Sep 7 (APAC Media): The rupee gained 4 paise to 94.39 against the US dollar in early trade on Monday, supported by foreign currency inflows, though elevated crude oil prices and geopolitical tensions weighed on investor sentiment.
At the interbank foreign exchange market, the rupee opened at 94.40 against the US dollar and touched 94.39 in early deals, compared with 94.43 at the previous close.
Forex traders said inflows related to Foreign Currency Non-Resident (FCNR) deposits provided some support to the domestic currency.
However, a rise in crude oil prices and uncertainty surrounding developments in West Asia kept pressure on the rupee.
Brent crude futures were trading near USD 97 a barrel amid concerns over possible disruptions to global oil supplies. Higher crude prices are generally negative for the rupee as India, one of the world’s largest oil importers, has to spend more dollars on overseas purchases.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, was around 99.18.
Market participants said investors would closely track developments in global oil markets, foreign fund flows and geopolitical developments for further cues on the rupee’s movement.
Analysts said the domestic currency could remain volatile in the near term as rising energy prices and safe-haven demand for the US dollar offset support from foreign currency inflows.
The rupee’s movement is also likely to be influenced by equity market trends and broader global risk sentiment.
Meanwhile, India’s foreign exchange reserves stood at a record USD 740.803 billion in the week ended August 28, providing a cushion against external financial pressures.
The domestic currency had gained 8 paise to close at 94.43 against the US dollar on Friday.
–ENDS–
Disclaimer:Â This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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