Rupee soars 43 paise to hit 4-week high on hopes of Ukraine-Russia truce

Brent crude futures, the global oil benchmark, rose 0.60 per cent to USD 113.15 per barrel

The rupee spurted by 43 paise -- its biggest single-day gain in 2022 -- to close at a four-week high of 75.73 against the US currency on dollar selling by exporters amid hopes of a peace agreement between warring Russia and Ukraine and low crude oil prices.

A weak dollar in the overseas markets and gains in the domestic equities for a second straight day also propped up the local unit, forex traders said. At the interbank forex market, the local unit opened higher at 75.97 later touched the day's low of 76.15.

The rupee however rebounded towards the close of the trade and settled at the day's high level of 75.73, a level not seen since February 28. The 43-paise jump is the biggest single-day gain in the unit since November 8. In the previous session, the rupee had settled at 76.16 against the US dollar.

"The Indian rupee edged higher amid the slide witnessed in crude oil prices and "risk-on" sentiments in the markets. Crude prices have given up much of the risk premium amid hopes of reconciliation as Russia and Ukraine seem to be moving towards a peace deal," Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking said.

Besides, China's intensifying Covid-19 crackdown has raised worries about weak fuel demand from the world's largest oil importer, further suppressing oil prices, Sachdeva said, adding that gains in the local currency have been capped as investors are bracing for aggressive rate increases by the US Fed in its battle against high inflation.

In futures trade, the USD-INR pair for March month contract traded at 75.9875 while the April month contract quoted at 76.3225 on NSE.

Jateen Trivedi, Senior Research Analyst at LKP Securities, said, "Rupee hovered around 76.00 as crude traded soft below USD 110 dropping USD 10 in the last two days giving strength to the rupee. The dollar index has been holding gains around USD 99 as Fed's policy in May could be around 50 basis points due to the highest level of inflation in US."

The dollar index, which measures the greenback's strength against a basket of six currencies, fell sharply by 0.34 per cent to 98.71. Brent crude futures, the global oil benchmark, traded lower during the day but recovered by 0.60 per cent to USD 113.15 per barrel in evening trade.

On the domestic equity market front, the BSE Sensex ended 350 points or 0.61 per cent higher at 57,943.65, while the broader NSE Nifty advanced 103.30 points or 0.60 per cent to 17,325.30.

Foreign institutional investors turned net buyers in the capital market on Tuesday as they sold bought worth Rs 35 crore on net basis, according to stock exchange data.

According to the latest public debt management report, the government's total liabilities rose to Rs 128.41 lakh crore in the December quarter from Rs 125.71 lakh crore in the three months ended September 2021.

The increase reflects a quarter-on-quarter increase of 2.15 per cent in October-December 2021-22.

The report released by the finance ministry on Monday said public debt accounted for 91.60 per cent of the total outstanding liabilities in the December quarter compared to 91.15 per cent at the end of September.