NEW DELHI — The Indian rupee strengthened for a second consecutive trading session Friday, gaining 63 paise to close provisionally at 95.73 against the U.S. dollar.
The currency was supported by easing crude oil prices, gains in domestic equity markets and expectations that the Reserve Bank of India would act to limit excessive volatility in the foreign exchange market.
The rupee opened at 96.30 against the dollar in the interbank foreign exchange market and rose sharply during the session. It touched an intraday high of 95.30 and a low of 95.68 before settling at 95.73.
The latest gain came a day after the rupee rebounded 50 paise from a record closing low to end at 96.36 against the dollar.
“This recovery is largely attributed to the Reserve Bank of India’s active intervention following its USD/INR buy-sell swap announcement, along with easing geopolitical tensions that have softened imported commodity prices,” an analyst said.
Forex market participants said sentiment improved after U.S. Secretary of State Marco Rubio suggested that diplomatic efforts related to Iran were progressing constructively. The comments helped reduce concerns about possible disruptions in global energy markets, easing pressure on emerging-market currencies, including the rupee.
The Indian currency also drew support from lower U.S. Treasury yields and strength in local equities.
Indian benchmark indices ended higher Friday. The Sensex rose 231.99 points to close at 75,415.35, while the Nifty advanced 64.60 points to settle at 23,719.30.
Analysts cautioned that geopolitical developments remain a key risk for the rupee.
“For now, the near-term trend has turned supportive for the rupee, with RBI intervention continuing to play a key role in controlling volatility and restoring confidence in the forex market,” an analyst said.
The rupee is expected to trade in a range of 95.00 to 95.90 in the near term, another analyst said. (Source: IANS)
