Rupee rises by 45 paise to close at 3-week high on forex inflows

At the interbank foreign exchange market, the domestic currency opened strong at 79.55 per dollar. It hovered in a range of 79.56 to 79.17 during the session.

Mumbai: The rupee on Friday notched up its biggest single-day gain in nine months to close at a three-week high of 79.24 against the US dollar on fresh capital inflows and a weak green back in global markets. The rupee shot up by 45 paise, posting its biggest single-day gain since October 20, 2021. At the interbank foreign exchange market, the domestic currency opened strong at 79.55 per dollar. It hovered in a range of 79.56 to 79.17 during the session.

The domestic unit finally settled at 79.24 against the greenback, the highest closing level since July 7. "Rupee traded strong as the dollar index witnessed weakness which pushed the dollar to a low of 79.17 as FED's data-driven stance dragged the greenback lower at USD 106. Crude price volatility kept gains somewhat limited in rupee," Jateen Trivedi, VP Research Analyst at LKP Securities.

"The rupee registered the biggest single-day gain after October 20, as the dollar sagged and equities advanced. Domestic equities and the rupee got support from month-end re-balancing along with exporters' dollar selling," Dilip Parmar, Research Analyst, HDFC Securities, said. In the near term, USD/INR is expected to trade with a negative bias with downside support at 79.20 and 78.90 while on the higher side previous support of 79.70 becomes resistance, he added.

The rupee gained against the dollar, thanks to massive long liquidation post-back-to-back GDP contraction in the US, said Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd. Over the next week further liquidation can be seen but we expect the pair to find a strong support near 78.80/90 levels on spot.

The range can be between 78.80 and 79.65 on spot, Banerjee said. On the domestic equity market front, the BSE Sensex ended 712.46 points or 1.25 per cent higher at 57,570.25, while the broader NSE Nifty rose 228.65 points or 1.35 per cent to 17,158.25. The dollar index, which measures the greenback's strength against a basket of six currencies, slipped 0.21 per cent to 106.13.

Foreign institutional investors remained net buyers in the capital markets as they picked up shares worth Rs 1,046 crore on Friday, as per exchange data. Brent crude futures, the global oil benchmark, rose 2.28 per cent to USD 109.58 per barrel. (PTI)