The rupee gained 14 paise to close at 89.84 (provisional) against the U.S. dollar, on Tuesday, which was largely due to the dollar selling by the Reserve Bank of India (RBI), forex market traders said.
The domestic currency was weak in the interbank foreign exchange market starting at 89.98 against the greenback. In the session, it fluctuated between 89.72 and 89.98 as the intervention of RBI made the rupee to tame down the volatility and provided support. The local unit finally closed at 89.84 which is a reversal of the close on Monday.
In the last trading day, the rupee lost 8 pais to close at 89.98 against the U.S. dollar as it was under the pressure of the foreign fund outflow and solid international signs. According to traders, central bank action dominated gains on Tuesday compared to overall optimism of the market.
In the meantime, the dollar index, which reflects the power of the currency of the United States against a blend of six major currencies, was gaining slightly by 0.06 percent at 97.99. A marginally tighter dollar allowed the rupee to appreciate, although RBI intervention gave it short-term alleviation.
The world standard of Brent crude oil increased 0.47% to $62.23 per barrel in futures trade in commodities market. Analysts said the increase was due to the low volumes of year-end trades and the pervading issue of global demand, both of which persist in the emerging market currencies like the rupee.
At the domestic equity, benchmark indices were slightly lower. The 30 share BSE Sensex ended 20.46 points to hit at 84,675.08, and the NSE Nifty managed to drop by 3.25 points to close at 25,938.85, representing reluctance among the investors.
Foreign Institutional Investors (FIIs) continued to be net sellers in the equity market selling 2,759.89 crore on Monday.
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