Rupee Hits One-Month High Against US Dollar on Inflows, Lower Oil Prices
The Indian rupee appreciated 14 paise to reach 87.88 against the US dollar in early trade today, marking its strongest level in a month, driven by increased foreign fund inflows and declining crude oil prices.
At the interbank foreign exchange market, the rupee opened at 87.94 and fluctuated within a narrow range. It reached a high of 87.88 and a low of 87.95 before settling at 87.88 against the dollar, a gain from yesterday’s close of 88.02. The positive movement comes as a welcome sign for importers and could help ease inflationary pressures.
Domestic stock markets also contributed to the rupee’s strength, with the Sensex soaring 668.88 points, or 0.83 percent, to 84,621.07 and the Nifty advancing 202.25 points, or 0.79 percent, to 25,912.50 in early trading. Analysts attribute this to sustained buying from Domestic Institutional Investors (DIIs) and a reduction in selling pressure from Foreign Institutional Investors (FIIs). For more on market performance, see the BSE India website.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted a shift in FII activity, stating, “FIIs have substantially reduced their selling and have even turned buyers in some days.” He added that, “For October up to 17th, FII selling has drastically reduced to only ₹4,114 crore. The principal reason for this change in FII strategy is the reduced valuation differential between India and other markets.” The dollar index edged up 0.02 percent to 98.45, while Brent crude fell 0.31 percent to $61.10 per barrel. The Reserve Bank of India closely monitors these fluctuations.
Stock exchanges will hold a special Muhurat trading session on Tuesday from 1:45 pm to 2:45 pm for Laxmi Pujan, while regular trading will resume on Wednesday.
