The Indian rupee was range-bound and closed little changed at 83.94 (provisional) against the US dollar on Friday as stocks rose domestically, as a weaker greenback offset the selling pressure by foreign investors due to increased geopolitical tension in the Middle East. Therefore, the rupee ended up at the same price in the narrow range in INR vs USD rate.
In the interbank foreign exchange market, the rupee opened at 83.93 and even made an intra-day low of 83.96 to the US dollar, upon which it closed at 83.94, which is the same as the prior closing, they said. On Wednesday, the rupee strengthened further by 3 paise to close at 83.94 against the dollar.
The dollar index, which tracks the value of the greenback against a pool of six other currencies, fell 0.14% at 102.66, while market players waited for the US consumer confidence index and housing market data which were due to be released later in the day. These economic indicators’ expectations were a cause of dollar’s dismal performance during the session.
At the same time, the international marker, Brent crude oil, decreased by 1.20%, the share price is USD 80.07 per barrel. This decline in the global oil prices brought some reprieve to the rupee since India is a net importer of the commodity.
Domestic equity markets saw a good haul; the Sensex rose by 1330.96 points, or 1.68%, to end at a record high of 80,436.84 points. Like the Sensex, the Nifty also recorded handsome gains; the Nifty forty added 397.40 points, or 1.65%, in order to reach the total of 24,541.15 points.
Contrary to the general bullish trends visible in the equity markets, FIIs continued to act as net sellers, selling equities to the tune of Rs 2,595.27 crore on Wednesday, as per the exchange data available. The effects of high import rates, the outflow of foreign exchange, and geopolitical fears stabilized the rupee and made it rather appreciated.
It was evident the rupee was propped up by gains in domestic equities along with the INR vs USD rate, and a weakened dollar, but concerned by sharp foreign fund outflows and global vagaries, especially in the Middle East.
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