Indian Rupee opens at 86.23/$, climbs to highest level in eight weeks

The Indian rupee opened stronger against the US Dollar for the eight consecutive session on Friday amid inflows into equities, even as the dollar index rose along with crude oil prices. 

 

The domestic currency opened 14 paise stronger at 86.23 against the greenback after closing at 86.37 on Thursday, according to Bloomberg data. The Rupee closed higher for the seventh straight day on Thursday, the longest winning streak since March 24 last year. The currency has appreciated by 1.46 per cent in March so far, tracking the fall in the dollar index. Meanwhile, during the current financial year, it witnessed a 3 per cent fall. 

 

The Rupee which made a three-month high is slated to open stronger, according to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. Rupee has been gaining as foreign institutional investors (FPIs) turned net buyers in equities for second time during the week and have been buying heavily into debt, he said.  

 

FPIs turned net buyers of ₹3,239.14 crore from Indian equities. Global funds have pulled out ₹1.43 trillion from domestic stocks so far this year. 

 

Demand from oil companies also looks muted while the Reserve Bank of India has hardly stepped in to buy dollars just slowing down the gains, Bhansali said. "For the day, the Rupee should take support from 83.10 and remain within a range of 83.10 to 83.50."

 

The Indian rupee experienced significant volatility, reacting to the Fed’s meeting while drawing strength from strong FII inflows, according to Amit Pabari, managing director at CR Forex Advisors. "The currency is expected to trade between 86.00 and 86.80 in the near term. With the current global headwinds a slight rebound towards the 86.50-86.60 range is expected." However, as conditions improve, every uptick could present a selling opportunity, potentially driving the rupee towards the 85.80 level, he added.  

 

The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.44 per cent at 103.89. The dollar index was weakened by 3.4 per cent in March, the highest since November 2022. Fed Chair Jerome Powell reinforcing the stance that inflationary risks remain a concern causing the dollar index to gain back to 104.13, Pabari said. 

 

Crude oil prices advanced after for the second straight day as amid geopolitical tensions. Brent crude oil was up 0.35 per cent to $72.25 per barrel, while WTI crude was up 1.64 per cent at 68.26 per barrel as of 9:05 AM IST.