Noida, Oct 15 (APAC Media): The Indian rupee appreciated 31 paise to 94.86 against the US dollar in early trade on Thursday, supported by the Reserve Bank of India’s (RBI) foreign exchange interventions and liquidity-tightening measures.
Forex market participants attributed the domestic currency’s gains to continued central bank support and the unwinding of long dollar positions. However, persistent external macroeconomic pressures could limit further appreciation, they said.
At the interbank foreign exchange market, the rupee opened at 94.95 against the dollar before strengthening to 94.86, marking a gain of 31 paise over its previous closing level.
On Wednesday, the domestic currency had risen 19 paise to settle at 95.17 against the US dollar, extending its recovery.
Amit Pabari, Managing Director of CR Forex Advisors, said the rupee had moved below the 95.00–95.50 range, bringing the 94.80 level into focus.
A sustained break below 94.80 could pave the way for a further appreciation of 50–75 paise, he said, adding that reduced direct dollar demand from oil companies could provide additional support to the currency.
The RBI’s recent foreign exchange measures, including a special dollar window for oil companies, have helped ease immediate pressure on the spot market.
Meanwhile, inflationary pressures remain a concern. India’s wholesale price index (WPI) inflation accelerated to 11.39 per cent from 9.92 per cent, while food inflation stood at 8.66 per cent. Consumer price index (CPI) inflation was recorded at 5.54 per cent.
Rising inflation has strengthened market expectations of possible interest rate increases over the next 12 months. A tighter monetary policy stance could support the rupee through favourable interest-rate differentials and investment flows, analysts said.
The dollar index, which measures the greenback’s strength against six major currencies, declined 0.54 per cent to 101.99. Brent crude futures fell 1.66 per cent to USD 104.30 per barrel, offering some relief to oil-importing India.
However, sustained currency gains will depend on global market conditions, capital flows and the continuation of supportive domestic measures.
-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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