Rupee gained 29 paise vs US dollar today to trade at a nearly three-month high level against the US dollar on foreign fund inflows, along with a weak US dollar and easing crude oil prices.
The rupee gained 29 paise today to trade at a nearly three-month high level against the US dollar on foreign fund inflows, along with a weak US dollar and easing crude oil prices. According to forex traders, the rupee got a boost today after the Reserve Bank of India on Monday announced to buy bonds worth Rs 8,000 crore via open market operations (OMOs) to ease tight cash conditions. The rupee also strengthened after the RBI board meet outcome removed uncertainty over a growing rift over policy decisions between the government and the central bank.
The rupee gained for the sixth consecutive session on Tuesday, appreciating by 29 paise to trade at a nearly three-month high of 71.38 against the dollar in opening trade. The domestic currency, which opened at 71.39 vs the US dollar at the Interbank Foreign Exchange, rose further to trade at 71.38 against the US dollar — the highest level since September 4. Earlier on Monday, the rupee had gained 26 paise to end at a 10-week high of 71.67 against the greenback.
“Rupee yesterday closed at a 10-week high of 71.67 against a previous close of 71.93. On the domestic front, FIIs continued to be buyers; bought shares worth Rs 1,103.36 cr on 19 November as per provisional figures. The DIIs, on the other end, were sellers to the tune of Rs 310.26 crore,” Geojit Financial Services said in a note.
“RBI in its board meeting decided to work on the PCA framework for banks and also discussed capital requirements for banks… In other news, RBI may conduct OMO to inject Rs 8,000 crore liquidity to the system on November 22,” it said. The note added that for the Indian currency, 70.70 and 69.63 are major levels on the upside while on the flip side, 72.85 will be the support level.
In a 9-hour long board meeting on Monday, the RBI agreed to form an expert committee on sharing of surplus capital and restructure loans of small businesses up to Rs 25 crore. The central bank also announced that it would infuse Rs 8,000 crore into the system through OMOs on November 22. Meanwhile, in the global markets, the dollar struggled at a near two-week low against a basket of currencies, while oil markets lost steam as a deteriorating economic outlook and a surge in US production outweighed expected supply cuts by the Organization of the Petroleum Exporting Countries (OPEC), according to a Reuters report.