Daijiworld Media Network - Mumbai
Mumbai, Jun 20: The rupee appreciated by 14 paise to close at 86.59 against the US dollar on Friday, aided by easing global crude oil prices, a weaker greenback, robust domestic equities, and steady foreign fund inflows.
At the interbank foreign exchange market, the local currency opened at 86.65 and moved in a narrow range between 86.55 and 86.67, before ending at 86.59 — recovering from Thursday’s over two-month low close of 86.73.
The rebound follows a cumulative 69 paise decline over the previous three sessions, according to a PTI report.
Forex traders attributed the rupee's recovery to a dip in global oil prices after US President Donald Trump hinted at a two-week timeline for deciding on possible US involvement in the ongoing Israel-Iran conflict.
“The local currency was comforted by a dip in oil prices after the White House said President Trump will decide in the next two weeks whether the US will get involved in the Israel-Iran war,” said Maneesh Sharma, AVP - Commodities & Currencies, Anand Rathi Shares and Stock Brokers.
Despite Friday’s gain, Sharma noted the rupee has still posted a little over 1% decline for the month, largely due to rising geopolitical tensions and a spike in Brent crude prices to a five-month high following Israeli strikes on Iran.
Market participants are also watching the upcoming HDB Financial IPO for potential foreign fund inflows. “Expectations that the IPO will draw significant overseas interest are seen as supportive for the rupee,” Sharma added, forecasting a near-term range of 86.20 to 86.70.
The dollar index was trading 0.30% lower at 98.60, while Brent crude dropped 2.36% to $76.99 per barrel. On the domestic front, equity markets rallied, with the BSE Sensex surging 1,046.30 points to 82,408.17 and the NSE Nifty climbing 319.15 points to 25,112.40.
Foreign institutional investors remained net buyers, with inflows of Rs 934.62 cr on Thursday, as per exchange data.