Following the decline of the U.S. dollar on international currency markets, the Indian rupee strengthened by 15 paise in early Thursday trade, closing at 81.65 per dollar.
Traders in the foreign exchange market claims the local unit is supporting by strong inflows of foreign funds and crude oil prices below $75 per barrel.
The local unit strengthened against the dollar at the interbank foreign exchange, opening at 81.68 and eventually closing at 81.65, a 15 paise increase over the previous day’s finish.
The final exchange rate of the rupee for the dollar on Wednesday was 81.80.
The Dollar Index, which measures the value of the US dollar in relation to a group of six major currencies, decreased by 0.24 percent to 101.09 on Friday.
Rates at the Federal Reserve were raised by 25 basis points to 5.25%, as had been widely anticipated by the market. “The dollar index took a major hit after the Federal Open Market Committee (FOMC) removed references to future interest rate increases, suggesting a likely pause in June, from its statement,” said CR Forex Advisors MD Amit Pabari.
Brent crude futures, the international oil standard, rose 0.57 percent to $72.74 a barrel.
The local currency continues to trade higher as a result of widespread USD weakness and lowering petroleum prices. The RBI, concerned about currency fluctuations, has kept buying up the surplus dollars in order to increase its foreign exchange reserves. Mr. Pabari noted that FII remained optimistic in May because India was still competitive relative to its counterparts, which was a factor in reducing demand for the dollar.
According to the statistics from the stock exchange, foreign institutional investors (FIIs) were net purchasers in the stock market on Wednesday, spending a total of 1,338.00 crore on share purchases.
Furthermore, Mr. Pabari states, “overall, the rupee is expecte to trade in the narrow range of 81.70-82.30 levels as geopolitical tensions are increasing leading to huge volatility.” The benchmark 30-company index on the Bombay Stock Exchange (BSE Sensex) rose by 76.42 points, or 0.12%, to 61,269.72. Up 29.30 (or 0.16%) at 18,119.15 is where the wider NSE Nifty found itself.
