The rupee appreciated 12 paise to 78.94 against the US Dollar in opening trade on August 2, supported by foreign fund inflows and a weak greenback against key rivals overseas. Besides, softening crude oil prices strengthened domestic forex market sentiment, dealers said.
By 11.40 am, the Indian currency rose to over a one-month high, appreciating more than Rs 1.25/USD in three sessions. The rupee is poised for its biggest single-day gain over the past 16-months.
Notably, the INR has appreciated 2 percent from the record low of 80.06 which it hit on July 21. The rupee is now down 5.4 percent against the US Dollar over the past 24 hours and down -7.5 percent against USD over the past week.
In the morning trade, at the interbank foreign exchange, the rupee opened sharply up at 78.96 against the USD and gained further ground to quote at 78.94 in initial deals, registering a rise of 12 paise over the last close. In the previous session, the rupee had closed at 79.06 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.22 per cent to 105.21. Global oil benchmark Brent crude futures fell 1.05 per cent to USD 98.98 per barrel.
On the domestic equity market front, the 30-share Sensex was trading 88.55 points or 0.15 per cent lower at 58,026.95, while the broader NSE Nifty fell 35.65 points or 0.21 per cent to 17,304.40. Foreign institutional investors were net buyers in the capital market on Monday, purchasing shares worth Rs 2,320.61 crore, as per exchange data.
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A day earlier, the Indian rupee on August 1 closed at a one-month high after the dollar dropped and foreign investors turned positive. The currency has strengthened for the third session in a row.
In July, foreign investors bought $650 million worth of equities, for the first time since October 2021. The dollar index saw a sharp decline, from above 109 to below 106 now. Analysts said it is a decent swing, especially since the rupee has been under constant pressure, demand outstripping supply, on account of record deficit, capital outflows and a strong dollar.
The RBI released the June forwards numbers on Friday. It sold $18.3 billion from its forwards book, taking its total outstanding forwards book to $30.8 billion. In May, the total forward book was $49.19 billion. In June, it also sold another $1.2 billion in NDF (non-deliverable forwards).
(With PTI inputs)
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