The rupee initially faced losses but ended 4 paise higher at 83.48 against the US dollar on Friday, following a robust rebound in domestic equities. Forex traders noted that early trade saw the rupee decline due to risk aversion in global markets amid tensions in the Middle East.
However, reports of RBI intervention to support the rupee led to its recovery. Beginning at 83.58 against the greenback, it reached an intra-day high of 83.46. Closing at 83.48 against the dollar, it marked a 4 paise increase from the previous close.
The rebound in the rupee was partly attributed to reports from Iran stating no direct attack and attributing an explosion to their air defense system’s activity.
The dollar index, measuring the greenback against six currencies, was down by 0.08% at 106.06. Brent crude futures fell by 0.31% to USD 86.84 per barrel. Safe-haven demand for the US dollar and the rise in global crude oil prices might exert pressure on the rupee. However, RBI intervention could support the rupee at lower levels, with the USD/INR spot price expected to trade within a range of Rs 83.30 to Rs 83.80.
In domestic equities, heavy volatility was witnessed, but indices recovered from initial losses to end positively. The Sensex gained 599.34 points, or 0.83%, closing at 73,088.33 points, while the Nifty rose 151.15 points, or 0.69%, ending at 22,147.00 points. Foreign Institutional Investors (FIIs) were net sellers, offloading shares worth Rs 4,260.33 crore on Thursday, as per exchange data.
