Rupee Recovers in Early Trading Against US Dollar, Advances 16 Paise to 95.73

Mumbai: The Indian rupee recovered from its lowest level in more than two months and strengthened by 16 paise to 95.73 against the US dollar during early trading on Friday.

A positive opening in domestic equity markets and a decline in global crude oil prices supported the local currency. The rupee opened at 95.75 at the interbank foreign exchange market before improving further to 95.73 against the greenback.

The domestic currency had closed two paise higher at 95.89 against the dollar on Thursday.

However, the rupee had lost 150 paise, or nearly 1.5%, during the previous eight trading sessions. It stood at 94.43 against the US dollar on September 4.

Crude oil retreat provides relief

Forex market participants said the decline in crude oil prices below $104 per barrel helped ease pressure on the rupee. Oil prices had risen sharply earlier in the week, raising concerns about India’s import bill and inflation.

Brent crude futures, the global oil benchmark, fell 0.93% to $103.85 per barrel.

Lower crude oil prices generally support the Indian rupee because India imports a large share of its energy requirements. A sustained decline can reduce demand for dollars from domestic oil-importing companies.

US bond yields also retreated from elevated levels after the US Federal Reserve increased interest rates by 25 basis points.

Dollar index trades flat

The dollar index, which measures the greenback’s performance against six major currencies, slipped 0.02% to 99.97.

Indian equity benchmarks traded marginally higher. The Sensex gained 122.18 points, or 0.16%, to reach 74,436.77. The Nifty advanced 23.55 points, or 0.10%, to 23,294.15.

Foreign institutional investors remained net sellers in the domestic market and offloaded shares worth ₹3,208.76 crore on Thursday, according to provisional exchange data. Persistent foreign outflows could limit further gains in the rupee despite supportive equity and crude oil movements.