The rupee declined to as low as 74.91 against the dollar on Friday before ending nearly unchanged
The rupee traded in a narrow range against the US dollar and closed nearly unchanged at 74.88 on Monday. It moved in a range of 13 paise, between 74.78 and 74.91, against the greenback, having started the four-hour session stronger at 74.87 compared to its previous close of 74.90. Analysts say weakness in the dollar overseas supported the rupee but volatility domestic equity markets put pressure on the currency.
Domestic stock markets were set to close higher on Monday to break a three-day losing streak. The S&P BSE Sensex index rose as much as 0.64 per cent to touch 38,119.38 during the session, and the broader NSE Nifty 50 benchmark climbed to as high as 11,248.90, up 0.63 per cent from its previous close.
Crude oil prices rose on Monday with global benchmark Brent futures last seen trading 0.42 per cent higher at $44.99 per barrel.
The dollar index – which gauges the greenback against six other currencies – was last seen trading flat, having declined as much as 0.17 per cent earlier on Monday.
Analysts expect the rupee to continue to trade sideways against the greenback in the near term.
“The central bank’s reserves have risen for seven straight weeks now. Recent price action in the USD-INR (pair) despite significant inflows seems to suggest the RBI is continuing to relentlessly shore up its reserves further… Asian currencies are stronger against the dollar,” said Abhishek Goenka, founder and CEO of forex advisory firm IFA Global.
The country’s foreign exchange reserves rose by $3.62 billion to a record $538.19 billion in the week ended August 7, RBI data showed on Friday.
Meanwhile, the trade deficit in goods came in at $4.83 billion in July, after its first trade surplus in over 18 years in the previous month, official data showed on the same day.
At the current level, the rupee has recovered 2.64 per cent against the US currency since an all-time low of 76.91 registered in April, but is still down 4.93 per cent so far this year.
