The Indian rupee rose 7 paise to reach 90.87 (provisional) against the U.S. dollar on Monday, driven by the drop in world crude oil prices and the weakening of the United States dollar amid unknown trade related news across the globe.
The domestic currency started at 90.76 and traded between 90.67 and 90.89 in the day in the interbank foreign exchange market. It later came to rest at 90.87, which was a minor increase against the last close. Forex traders traced the upward trend to a reduction in the prices of crude oil and the dollar index that declined 0.32 to 97.47 against major six currencies.
The world benchmark of crude, Brent crude, fell by 0.39 percent to be priced at 71.49 per barrel. When prices decrease, the rupee is usually supported by the low oil prices since India is a large importer of crude oil and enjoys the low cost of imports.
Domestic equity markets were also positive. BSE Sensex shot up by 479.95 to close at 83294.66 and NSE Nifty also rose by 141.75 to close at 25713 showing better investor confidence.
Nevertheless, the foreign institutional investors (FIIs) remained wary and sold 3,3461 crore of equities on Friday, as per the exchange data.
In the meantime, the foreign exchange reserves of India increased by $8.663 billion to make a record high of $725.727 billion until the end of the week that started on February 13 as per data released by the Reserve Bank of India which further supported the domestic currency.
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