Rupee edges 5 paise higher against US dollar on stable crude prices

The Indian rupee on Monday settled 5 paise higher at 71.32 against the US dollar, helped by some moderation in crude prices.

However, stronger US dollar against key rival currencies and subdued domestic equities kept the rupee's rise in check.

At the interbank foreign exchange market, the domestic unit started on a weak note at 71.45 against the US dollar, but kept on reclaiming the lost ground as the day progressed. During the session, it swung between a low of 71.48 and a high of 71.24.

The Indian currency finally settled at 71.32 against the greenback, registering a rise of 5 paise over its previous close.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.05 per cent to 99.17.

Global crude benchmark Brent was quoted at USD 57.22 per barrel, down 0.17 per cent.

"Rupee started the day at minor weak note going till 71.45, but started to trade strong on back of stable crude prices today with less volatile session observed. Fresh update from China's central of cutting key interest rates to support the economy jolted by the Corona virus gives minor support to local currencies," says Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.

Meanwhile, worries over rising death toll and the economic fallout from the novel coronavirus continued to haunt investors globally.

The coronavirus epidemic that emerged in central China has now killed nearly 1,800 people and spread around the world.

The latest figures from China show there are more than 70,000 people infected in the country.

Further weakening investor sentiment, Moody's Investors Service has slashed India's growth forecast to 5.4 per cent for 2020 from 6.6 per cent projected earlier on slower-than-expected economic recovery.

On the equity front, the BSE Sensex closed 202.05 points, or 0.49 per cent, down at 41,055.69. The NSE barometer Nifty fell 67.75 points or 0.56 per cent to close at 12,045.80.

The 10-year Indian government bond yield was at 6.39 per cent.

Foreign institutional investors sold equities worth Rs 374.06 crore on a net basis on Monday, according to provisional exchange data.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.3865 and for rupee/euro at 77.3544. The reference rate for rupee/British pound was fixed at 93.1289 and for rupee/100 Japanese yen at 65.03.