Indian Rupee strengthens by 13 paise, rises for sixth-straight day

The domestic currency ended 13 paise stronger at 86.44 against the greenback after closing at 86.57 on Tuesday

Indian Rupee closed stronger against the US Dollar for the sixth consecutive session on Wednesday as lower crude oil prices outweighed Dollar firmness.  

The local unit ended 13 paise stronger at 86.44 against the greenback after closing at 86.57 on Tuesday, according to Bloomberg data. The rupee has appreciated for the sixth consecutive day, the longest gaining streak since September last year.   The curreny has gained over 1.2 per cent in March so far, tracking the fall in the dollar index. Meanwhile, during the current financial year, it witnessed a 3.60 per cent fall. The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.35 per cent at 103.60. 

 

The Rupee depreciated in early trade following slight weakness in Asian currencies and the Middle East tensions, according to Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP. RBI has announced fresh open market operations (OMO) to ease the liquidity position which is short by Rs 2.50 trillion, he said. While these moves aim to curb the liquidity concern, they could also exert downward pressure on the rupee, experts said. 

  Meanwhile, the Reserve Bank of India (RBI) has likely been "opportunistically" absorbing dollar inflows over the past few sessions, probably to replenish the forex reserves expended on supporting the rupee over the past few months, according to reports.

  Foreign institutional investors finally turned net buyers injecting Rs 1,462.96 crores into Indian equities. Global funds have pulled out Rs 1.47 trillion from domestic stocks so far this year. 

 

Crude oil prices slipped after a two day gain as global excess supply of crude oil overshadowed escalating tensions in the Middle East. Brent crude oil was down 0.74 per cent to $70.04 per barrel, while WTI crude was down 0.87 per cent at 66.32 per barrel as of 3:30 PM IST. 

 

Donald Trump’s proposed reciprocal tariffs and sector-specific trade restrictions which are set to be rolled out on April 2 could create further pressure on the rupee, according to Amit Pabari, managing director of CR Forex Advisors. "After giving a breakdown of Head-and-Shoulders pattern, the rupee has been in a strong momentum with 86.80 acting as a strong resistance, while a further breach below 86.50 could pave a path towards 86.20-86.00."