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The rupee depreciated by 2 paise to close at 81.80 (provisional) against the US dollar on May 8 tracking improvement in crude oil prices.
Forex traders said the rupee consolidated in a narrow range, benefiting from a weak American currency and positive domestic equities on improving crude prices.
in interbank forex, The local unit opened on a positive note at 81.76 But it closed 2 paise lower at 81.80 against the US dollar despite a firm trend in domestic equities.
The rupee touched a high of 81.70 and a low of 81.82 against the American currency during the day.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07% to 101.13.
Global oil benchmark Brent crude futures rose 1.93% to $76.75 a barrel.
Crude oil prices sharply depreciated the rupee today. However, a weak US dollar and positive domestic equities supported the decline, said Anuj Chowdhary, research analyst at Sharekhan by BNP Paribas.
The US dollar declined amid renewed concerns on the banking sector.
“We expect Rupee to trade with slight positive bias on increased risk appetite in global markets and weak US Dollar. FIIs remain net buyers in last seven sessions.
“However, recovery in crude oil prices may turn bullish. Investors may remain cautious ahead of inflation data from India and US later this week. We expect USD/INR to move higher in the near term,” said Choudhary. Spot will trade between 81.20 to 82.20.” Said.
In the domestic equity market, the 30-share BSE Sensex advanced 709.96 points, or 1.16%, to close at 61,764.25. The broader NSE Nifty settled 195.40 points, or 1.08%, higher at 18,264.40.
Foreign institutional investors (FIIs) were net buyers in the capital market on Friday as they bought shares worth ₹777.68 crore, according to exchange data.
Meanwhile, India’s foreign exchange reserves increased by $4.532 billion to $588.78 billion for the week ended April 28, the Reserve Bank of India said on Friday.
The total reserves had decreased by $ 2.164 billion to $ 584.248 billion in the previous week.