The Indian rupee saw a small rise of 1 paisa on Friday and closed at 85.53 against the US dollar, mainly because of more foreign money coming in and the dollar index going down a bit. Still, the progress was curtailed by increasing Brent crude prices, a drop in the stock market, and a higher trade deficit.
In the interbank market for currencies, the local money was strong at the opening and moved only slightly between 85.28 and 85.70 during the session, as mentioned by forex traders. The day ended with the index up at 85.53, slightly more than it was the day before, which was 85.54.
FII investments propped up the domestic currency and helped it improve. Additionally, the US dollar index, which looks at how the greenback compares to six other major currencies, went down by a small amount, which helped out some emerging market currencies like the rupee.
But global price increases for crude oil limited the rise of the Indian rupee. Brent crude, which is used as a standard to price oil around the world, went up by a very small amount to $64.62 per barrel in future trades, which could put more pressure on India’s spending for oil imports.
Additionally, poor movements in the Indian stock market held back the rupee from climbing higher. The Sensex went down by 200.15 points to sit at 82,330.59, and the Nifty dropped by 42.30 to finish at 25,019.80.
At the same time, the problems were further complicated on Thursday when India’s trade deficit hit a five-month high of USD 26.42 billion. The year-on-year import value increased by 19.12% to hit USD 64.91 billion, since the country imported more crude oil and fertilisers. Meanwhile, exports grew by 9.03% to reach USD 38.49 billion, which is the biggest six-month figure we have seen, thanks to more demand for electronics and engineering products.
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