Rupee settles 11 paise higher at 71.27 against US dollar

The Indian rupee on Tuesday appreciated by 11 paise to close at 71.27 against the US dollar, tracking heavy buying in domestic equities and easing crude prices.

However, concerns over fiscal slippage and rising coronavirus outbreak fears still remain, forex traders said.

The Reserve Bank of India's monetary policy outcome could be the next trigger for the domestic unit, as its commentary on inflation and growth forecast will be followed closely by the investors, they added.

At the interbank foreign exchange market, the local currency opened at 71.24. During the day, the local unit saw a high of 71.09 and a low of 71.29. The domestic unit finally settled at 71.27, up 11 paise from its previous close.

The Reserve Bank of India is scheduled to announce the outcome of its sixth bi-monthly monetary policy statement for 2019-20 on February 6, 2020.

Forex traders further said easing crude oil prices supported the local unit.

The global crude benchmark Brent futures rose 0.75 per cent to trade at USD 54.86 per barrel.

Crude prices have seen some moderation in the past few sessions over demand slump amid rising coronavirus cases in China and other regions.

"Globally equities witnessed inflow and lower crude prices supported the rupee in the domestic market. Crude prices which are trading at 4-month lows can keep rupee strong," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.

Trivedi, however, noted that "crude price can surprise as OPEC+ is considering production cut of around 500,000bpd and even further which can support the crude oil prices".

The BSE benchmark closed at 40,789.38, up 2.30 per cent or 917.07 points. This was the biggest single-day rise for the Sensex since September 23, 2019. The broader NSE Nifty settled at 11,979.65, surging 2.32 per cent or 271.75 points -- gaining the most in a single day in over four months.