Indian rupee appreciated by 13 paise to close at 66.77 against the US dollar on Friday at the Interbank Foreign Exchange (Forex) market following firm domestic markets amid foreign capital inflows and selling of American currency by banks and exporters. The local currency opened flat at 66.91 against the US dollar and it had closed 8 paise up at 66.91 on Thursday. The BSE Sensex and NSE Nifty opened higher on Friday tracking global cues.The BSE Sensex soared 363.98 points to close at 28,078.35, while NSE Nifty surged 132.05 points to end at 8,683.15.
Dollar remained weak against other emerging market currencies ahead of US’ crucial employment report, which will be a decisive factor for US Federal Reserve’s interest rates in coming months.
The Indian currency hovered in the range of 66.74 and 66.91 during the day. The currency appreciated by around 20 paise during the week.
“Indian rupee was strong on the back of inflows inequity and debt markets. US dollar remained weak ahead of US non-farm employment July data. Intervention from RBI disallowed rupee to strengthen beyond, ” Anindya Banerjee, currency analyst, Kotak Securities said.
The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.81 and for Euro stood at 74.45 on August 5, 2016. While the RBI’s reference rate for the Yen stood at 66.13, the reference rate for the Great Britain Pound (GBP) stood at 87.74.
“Indian rupee would continue to be driven by global markets factors. Fed rate hikes, US elections, next ECB/BOJ actions and their perceived impact, oil price resuming bear market etc. would continue to determine Indian currency’s level. Dollar/Rupee would maintain stability in the range of 66.50 to 68.50 in the short term with a reasonable chance of depreciation towards 70+ levels by this fiscal end,” Srinivas Puni, director, QuantArt Market Solutions.
Pound weakened after Bank of of England slashed interest rates to 0.25 per cent, hinting that can lower it further if the economy worsens on Brexit concerns.