Noida, Oct 16 (APAC Media): The rupee appreciated 20 paise to ₹94.79 against the US dollar in early trade on Friday, supported by a decline in the dollar index and easing US Treasury yields.
However, elevated crude oil prices and weak domestic equities capped the currency’s gains.
At the interbank foreign exchange market, the rupee opened at ₹94.75 against the dollar and traded at ₹94.79 in early deals. The domestic currency had settled 18 paise higher at ₹94.99 against the US dollar on Thursday.
Forex market participants said the rupee drew support from a softer dollar and measures undertaken by the Reserve Bank of India (RBI) to stabilise the foreign exchange market. Lower US Treasury yields also improved sentiment towards emerging-market currencies.
The dollar index, which gauges the greenback’s strength against a basket of six major currencies, declined 0.54 per cent to 102 during early trade.
Analysts, however, cautioned that persistently high crude oil prices could limit further appreciation of the Indian currency. India depends heavily on imports to meet its crude oil requirements, making the rupee vulnerable to fluctuations in global energy prices.
Brent crude futures declined 0.54 per cent to $105.35 per barrel. Despite the fall, oil prices remained elevated, raising concerns over India’s import bill and its potential impact on the country’s external balances.
Domestic equity markets also remained under pressure during early trade. The BSE Sensex fell 113 points to 74,187, while the Nifty 50 declined 27.20 points to 22,967.15.
Foreign institutional investors continued to sell Indian equities, offloading shares worth ₹5,285.37 crore on a net basis on Thursday, according to exchange data. Persistent foreign fund outflows have remained a key factor influencing the domestic currency.
Market participants are expected to track movements in the dollar index, crude oil prices and foreign investment flows for further cues on the rupee’s direction.
Developments in global financial markets and expectations surrounding US monetary policy are also likely to influence currency movements in the coming sessions.
-ENDS–
Disclaimer: 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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