Rupee rallies to nearly 2-month high as crude subsides

The rupee spurted by 32 paise to close at a nearly two-month high against the US currency on Friday as crude oil prices receded following reports that Saudi Arabia had agreed on a temporary ceasefire in Yemen.

The domestic currency closed higher by 0.44 per cent at 70.56 to the US dollar, a level not seen since August 2 when it had ended at 69.60.

The rupee had opened weak and declined to the day's low of 70.93 in early trade due to a stronger dollar and losses in stock markets.

Easing crude oil prices provided a fillip to the local currency that reversed losses in the mid-session and climbed to an intra-day high of 70.53, before finally ending at 70.56.

The local unit notched up gains of 38 paise on a weekly basis.

Global crude oil prices dropped on Friday after reports that Saudi Arabia has agreed to a partial ceasefire in Yemen against Houthi rebels, reducing risk of military action by its allies.

Oil production of Saudi Arabia returning to near-normal levels also dragged down oil prices.

Brent crude dropped 2.56 per cent to USD 61 per barrel while Opec basket declined 2.47 per cent to USD 62.35.

Foreign institutional investors sold shares worth a net Rs 213.60 crore on Friday, according to provisional exchange data.

Indian stock markets closed with losses largely in tandem with other Asian bourses due to rising political uncertainty in the US.

The BSE Sensex ended 167.17 points, or 0.43 per cent, lower at 38,822.57. The broader NSE Nifty shed 58.80 points, or 0.51 per cent, to end at 11,512.40.

The US dollar also traded near multi-week highs against major currencies following the impeachment probe against US President Donald Trump. The US dollar index was up 0.3 per cent at 99.16 in the spot market as the euro slid to around two-year low levels.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.9021 and for rupee/euro at 77.6619. The reference rate for rupee/British pound was fixed at 87.6766 and for rupee/100 Japanese yen at 65.87.