Noida, Sep 4 (APAC Media): The rupee appreciated 5 paise to 94.46 against the US dollar in early trade on Friday, supported by positive domestic equity markets and expectations of foreign fund inflows.
At the interbank foreign exchange market, the rupee opened at 94.53 against the US dollar and gained ground to touch 94.46 in early deals.
The domestic currency had settled 22 paise higher at 94.51 against the US dollar on Thursday.
Forex traders said the rupee was receiving support from improved investor sentiment and expectations of stronger capital inflows.
However, gains remained limited amid elevated crude oil prices and ongoing geopolitical concerns.
Market participants are closely monitoring developments in global oil markets, as higher crude prices can weigh on the rupee by increasing India’s import bill and demand for the US currency.
Geopolitical tensions, including developments involving the United States and Iran, are also likely to influence currency movements. Any escalation could trigger demand for safe-haven assets such as the US dollar and put pressure on emerging-market currencies.
The Reserve Bank of India is also expected to remain an important factor in the foreign exchange market. Its interventions have helped contain excessive volatility in the rupee and maintain orderly conditions in the currency market.
Meanwhile, India’s foreign exchange position has received a boost from foreign-currency deposits mobilised under a special central bank programme. The deposits reportedly reached a record USD 127.23 billion, strengthening the country’s external liquidity position.
In the domestic equity market, benchmark indices were trading higher in early deals, providing some support to the rupee.
Traders are expected to track foreign portfolio investment flows, crude oil prices, movements in the US dollar index and global risk sentiment for further direction.
Despite the marginal appreciation, analysts said the rupee could remain vulnerable to external factors, particularly oil prices and geopolitical developments.
At present, the currency is showing signs of resilience after recent pressure, although market participants remain cautious about its near-term trajectory.
–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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