Rupee pares initial losses, settles 3 paise up at 74.26/USD in first trading session of 2022

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The rupee pared its initial losses and closed on a positive note in the first trading session of 2022 on Monday, tracking positive domestic equities. At the interbank forex market, the local unit opened at 74.35 against the greenback and witnessed an intra-day high of 74.25 and a low of 74.47.

The domestic unit finally settled at 74.26 (provisional) against the US dollar, registering a gain of 3 paise over its previous close. The local unit had settled at 74.29 on the last trading day of 2021.

"Rupee started the year on a steady note, supported by stronger regional currencies and domestic equities…," said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar further noted that "dollar selling has been seen from local banks on behalf of exporters and expectation of better inflows from primary markets could continue this quarter as well. The market is pricing for around Rs 44,000 crore from IPO this quarter."

On the domestic equity market front, the BSE Sensex ended 929.40 points or 1.60 per cent higher at 59,183.22, while the broader NSE Nifty advanced 271.65 points or 1.57 per cent to 17,625.70. Meanwhile, the dollar index, which measures the greenback's strength against the basket of six currencies, advanced 0.11 per cent to 95.77.

Brent crude futures, the global oil benchmark, rose 1.25 per cent to USD 78.75 per barrel. Foreign institutional investors were net buyers in the capital market on Friday, as they purchased shares worth Rs 575.39 crore, as per exchange data.