Rupee closes 12 paise higher on dollar selling

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Published: August 17, 2019 1:05:20 AM

Exporters are believed to have joined the dollar selling later during the day, according to forex traders.

The rupee closed at Rs 71.15 against the greenback, paring losses made during the previous two sessions. The rupee closed at Rs 71.15 against the greenback, paring losses made during the previous two sessions.

The Rupee closed 12 paise higher against the greenback on Friday, as traders sold dollars expecting some positive news on the foreign portfolio investors (FPI) surcharge issue post finance minister Nirmala Sitharaman’s meeting with the prime minister.

Exporters are believed to have joined the dollar selling later during the day, according to forex traders.

The rupee closed at Rs 71.15 against the greenback, paring losses made during the previous two sessions. During the day, the currency rose as high as Rs 71.04 to the dollar.

It is noteworthy that the rupee witnessed appreciation on a day when FPIs pulled out about $188 million from the equity markets, according to the provisional data on the exchanges. Currency experts said a stable yuan also contributed to the upside on the rupee.

KN Dey, managing partner at United Financial Consultants, is also of the belief that expectation of some positive news on the FPI surcharge matter could have resulted in the appreciation in the rupee. “The market is expecting some reforms from the Indian government after the FM-PM meet on Friday. The rise in the currency was a result of the anticipation,” he said.

The rupee has depreciated by 1.95% against the dollar since January this year. However, the rupee is not the worst performing currency in Asia this year. The South Korean won depreciated 8.29% in 2019 so far. The Thai baht, which has become a safe haven of sorts in Asia, appreciated 4.56% since January, making it the best performing Asian currency.

One other factor that could have given some amount of support to the currency in recent times is the falling oil prices. Brent crude has fallen from $74.57 from April-end to $58.74 per barrel as on Friday evening.

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