Indian rupee remained strong through out the day and closed 36 paise up at 66.66 against the US dollar at the Interbank Foreign Exchange on Thursday following selling of American currency by bankers and exporters amid firm domestic markets. The local currency opened 16 paise up at 66.86 against the US dollar and had closed flat at 67.02 against the American currency on Wednesday as investors remained cautious ahead of the US Federal Reserve policy decision. Domestic equity markets also supported the rupee that surged following their global counterparts. Global markets rallied after US Federal Reserve kept the policy rates unchanged. Sensex gained 265.71 points to end at 28,773.13, while NSE Nifty settled 90.30 points up at 8,867.45.
“US Fed’s verdict was on expected lines but market decided to take it on a positive way. As a result, emerging market(EM) currencies rallied against US Dollar. Indian Rupee not only benefited from the broad EM rally as well as on account of domestic tailwind. Favourable BOP data and prospect for rate hike triggered a sharp rally in INR as the pair traded below 66.70 @ 66.67 levels. Over the near term, USDINR can test the support of 66.30/40 region with 66.80/67.00 being the cap,” said Anindya Banerjee, currency analyst, Kotak Securities.
Dollar was weak against other emerging market currencies on US Federal Reserve policy outcome, which also helped in rupee’s rally
On Wednesday, the rupee had closed flat at 67.02 against the US dollar as demand for American currency rose among bankers and importers.
The local currency hovered in the range of 66.66 and 66.89. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.84 and for Euro stood at 75.02 on September 22, 2016. While the RBI’s reference rate for the Yen stood at 66.65, the reference rate for the Great Britain Pound (GBP) stood at 87.33.