Rupee Appreciates 5 Paise to Reach 83.39 Against US Dollar in Early Trade

Rupee Appreciates:  The Indian rupee kicked off the week on a positive note, gaining 5 paise to reach 83.39 against the US dollar in early trade on Monday. This rise was supported by a strong performance in domestic equities.

Forex traders observed that the local currency strengthened as both the American dollar and crude oil prices retreated from recent highs. At the interbank foreign exchange market, the rupee opened at 83.40 against the greenback and touched 83.39 in the initial trade, marking a 5-paise increase from its previous close.

Last Friday, the rupee had appreciated by 8 paise to close at 83.44 against the US dollar. Traders speculated that the Reserve Bank of India's intervention may have contributed to stabilizing the local unit.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP pointed out that Indian forex reserves declined to USD 643.162 billion after seven consecutive weeks of increase, potentially due to RBI's dollar sales to stabilize the rupee.

India's forex reserves dropped by $ 5.401 billion to $643.162 billion for the week ended April 12, as reported by the Reserve Bank. However, the overall reserves had increased by $ 2.88 billion to a new high of $648.562 billion in the previous reporting week.

Bhansali suggested that the RBI's continued presence would likely monitor rupee depreciation, while oil companies and Foreign Portfolio Investors (FPIs) purchase dollars.

In global markets, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading lower at 106.07 by 0.07 per cent. Additionally, Brent crude futures, the global oil benchmark, fell by 0.76 per cent to USD 86.63 per barrel.

On the domestic front, the benchmark indices started positively, with the BSE Sensex climbing 295.86 points or 0.40 per cent to 73,384.19, and the NSE Nifty advancing by 106.00 points or 0.48 per cent to 22,253.00 in early trade.

Foreign Institutional Investors (FIIs) remained net buyers in the capital markets on Friday, purchasing shares worth Rs 129.39 crore, according to exchange data.

With Reuters Inputs