The Indian rupee gained 7 paise to close at 83 (provisional) against the US dollar on Monday, buoyed by a weaker American currency and lower crude oil prices. However, subdued domestic markets and foreign fund outflows limited significant gains, according to forex traders. This event resulted in a bearish market in the new week.
At the interbank foreign exchange market, the rupee opened at 83.01 against the dollar, reaching an intraday high of 82.98 and a low of 83.02. It eventually settled at 83 (provisional) against the dollar, marking a 7-paise increase from its previous close of 83.07. Meanwhile, the dollar index, measuring the greenback’s strength against a basket of six currencies, edged up 0.04 percent to 104.15.
Brent crude futures, the global oil benchmark, dipped 0.51 percent to USD 81.77 per barrel.
On the domestic front, the Sensex dropped 523 points, or 0.73 percent, closing at 71,072.49, while the Nifty declined by 166.45 points, or 0.76 percent, settling at 21,616.05. Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, purchasing shares worth Rs 141.95 crore, as per exchange data.
Meanwhile, India’s forex reserves surged by USD 5.736 billion to USD 622.469 billion for the week ended February 2, as announced by the Reserve Bank on Friday.
During the preceding week, overall reserves had increased by USD 591 million to USD 616.733 billion. In conclusion, the Indian rupee appreciated against the US dollar, supported by a weaker dollar and declining crude oil prices. Despite challenges from domestic market conditions and foreign fund outflows, the rupee managed to make modest gains. Additionally, the surge in India’s forex reserves signals strength and stability in the country’s economic landscape.
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