Rupee rises 5 paise to 83.91 against US dollar during early trade

The rupee appreciated by 5 paise to 83.91 against the US dollar in early trade on Friday supported by weakening of the American currency in the overseas market and significant foreign fund inflows.

Forex traders said the rupee continues to trade within a tight range, as the Reserve Bank of India (RBI) is maintaining a firm grip on the domestic currency.

At the interbank foreign exchange market, the local unit opened at 83.92, then inched further to touch 83.91, registering a rise of 5 paise from its previous close.

On Thursday, the local unit settled 3 paise higher at 83.96 against the US dollar.

"The Indian rupee appears to be moving in its own orbit, refusing to appreciate and continuing to trade within a tight range, as the RBI maintains a firm grip on the domestic currency. In the near-term, the rupee is expected to trade within a narrow band of 83.80 to 84.05, while the medium-term outlook slightly broadens the range to 83.70 to 84.05," CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.30 per cent to 101.06 points.

Brent crude, the international benchmark, gained 0.49 per cent to USD 72.34 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex declined 114.32 points, or 0.14 per cent, to 82,848.39 points, while the Nifty was down 39.70 points, or 0.16 per cent, to 25,349.20 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday, as they purchased shares worth Rs 7,695.00 crore, according to exchange data.

On the domestic macroeconomic front, retail inflation in August inched up to 3.65 per cent, though vegetables and pulses witnessed price rise in double digits, according to official data released on Thursday.

India's industrial production output decelerated to 4.8 per cent year-on-year in July 2024, mainly due to poor performance of the manufacturing and mining sectors, as per official data released on Thursday.