Mumbai, Mar 26 (PTI) The rupee recovered from all-time low level and appreciated 32 paise to close at 83.29 against the US dollar on Tuesday on decline in the US dollar and positive Asian currencies.
Forex traders said weak domestic markets and surge in crude oil prices capped sharp gains for the local unit.
At the interbank foreign exchange market, the local unit opened at 83.33 against the greenback. The unit hit an intra-day high of 83.26 and a low of 83.37.
The local unit finally settled at 83.29 against the dollar, higher by 32 paise from its previous close.
On Friday, the rupee depreciated 48 paise to settle at an all-time low of 83.61 against the American currency.
Forex and equity markets were closed on Monday on account of Holi.
Market analysts said, for the domestic unit, record forex reserves provide a cushion, enabling the Reserve Bank to mitigate the rupee's downside.
India's forex reserves increased by USD 6.396 billion to USD 642.492 billion for the week ended March 15, the Reserve Bank said on Friday. In the previous reporting week, the overall reserves had risen by USD 10.47 billion to USD 636.095 billion.
"We expect the rupee to trade with a negative bias on expectations of a recovery in US dollar and rising crude oil prices. However, positive tone in the Asian currencies may support the rupee at lower levels.
"Any selling of dollars by the RBI may also support the rupee. Traders may take cues from durable goods orders and CB consumer confidence data from the US," said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12 per cent lower at 104.10, on softening US treasury yields and profit booking a higher levels.
Disappointing economic data from the US also weighed on the greenback. US new home sales declined to 662,000 in in February 2024 versus 664,000 in January 2024.
Dilip Parmar, Research Analyst, HDFC Securities, said the dollar selling from the IT companies supported the rupee in Tuesday's trade.
"The rupee is likely to consolidate between 83.50 and 83.20 amid the holiday truncated week with most of the financial year-end adjustment being done by the market participants. Technically, spot USD-INR is hovering near a record high level and heads for the first monthly gains after declining in the previous three months," he said.
Brent crude futures, the global oil benchmark, fell 0.12 per cent to USD 86.65 per barrel.
On the domestic equity market front, Sensex declined 361.64 points, or 0.50 per cent, to close at 72,470.30 points. The Nifty fell 92.05 points, or 0.42 per cent, to settle at 22,004.70 points.
Foreign institutional investors (FIIs) turned net buyers in the capital markets on Tuesday, as they purchased shares worth Rs 10.13 crore on a net basis, according to exchange data. PTI DRR HVA
Disclaimer: This article is published from a syndicated feed and has not been edited by the Deccan Chronicle team
