Mumbai: The Indian rupee strengthened by 13 paise to 95.65 against the US dollar in early trade on Tuesday, supported by improved domestic equity sentiment and relief in crude oil prices.
At the interbank foreign exchange market, the rupee opened at 95.75 and subsequently advanced to 95.65 against the American currency. This represented a gain of 13 paise from Monday’s closing level of 95.78.
Forex traders attributed the early recovery to crude oil retreating from elevated levels as immediate supply concerns eased. Saudi Arabia reportedly increased exports through the Strait of Hormuz, while investors remained hopeful that the damaged East-West pipeline would be partially restored.
Crude Oil And Dollar Remain Key Risks
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, said softer crude prices were supporting the Indian rupee. However, a firm dollar following the US Federal Reserve’s interest rate hike and continuing foreign portfolio outflows limited the currency’s gains.
Banerjee expects the rupee to remain range-bound. He identified 95.50 and 95 as support levels, while 96.30 could act as an upper barrier. Strong Reserve Bank of India intervention is expected if the dollar-rupee pair approaches the 96.30–96.50 region.
The RBI has also been absorbing surplus liquidity generated through special deposit inflows by conducting bond sales and reverse-repo auctions.
Markets Provide Support
The dollar index slipped 0.07 per cent to 100.35. Brent crude futures, however, rose 1.05 per cent to $101.39 per barrel after their earlier pullback.
Indian equities opened positively, with the Sensex gaining 42.51 points to 74,901.50 and the Nifty rising 39.75 points to 23,454.05.
Foreign institutional investors sold domestic shares worth ₹576.20 crore on Monday. Meanwhile, India’s eight core sectors grew 4.8 per cent in August, slowing from 5 per cent in July and 6.2 per cent a year earlier.
