Rupee Shows Resilience as Crude Oil, US Dollar Retreat

The Indian rupee consolidated and gained 3 paise to settle at 83.67 against the US dollar on Monday. Factors influencing this included a retreat in crude oil prices and the US dollar. Despite mixed domestic markets exerting pressure, FII inflows and potential RBI intervention could support the rupee.

The Indian rupee consolidated within a narrow range, closing 3 paise higher at 83.67 against the American dollar on Monday, bolstered by a fall in crude oil prices and a subdued US dollar.

Forex traders noted the rupee recovered from its previous all-time low, trading narrowly as domestic markets remained mixed-to-weak. The depreciation of the US dollar and a decline in crude oil prices provided a cushion to the rupee's downside.

The local currency opened at 83.66 in the interbank forex market, reaching an intraday high of 83.65 and a low of 83.68 during the trading session.

The rupee eventually settled at 83.67 against the dollar, marking a 3 paise gain from its previous close. On Friday, it had fallen 7 paise to a record low of 83.70 versus the US dollar.

Sharekhan by BNP Paribas Research Analyst Anuj Choudhary stated, "We expect the rupee to trade with a slight negative bias due to weak global markets and dollar strength, alongside weak Asian currencies and a depreciating yuan. Nevertheless, falling crude oil prices and FII inflows may lend support at lower levels."

Choudhary also noted potential RBI intervention and advised investors to monitor cues from India's Union Budget. He forecasted the USD-INR spot price to range between Rs 83.20 and Rs 84.20.

In related data, the dollar index dropped 0.17% to 104.22, while Brent crude futures traded 0.29% lower at USD 82.39 per barrel.

On the macroeconomic front, the RBI reported a forex reserves jump of USD 9.699 billion to an all-time high of USD 666.854 billion for the week ended July 12. This followed a USD 5.158 billion surge the previous week.

In domestic equity, the BSE Sensex shed 102.57 points to close at 80,502.08, and the Nifty dipped 21.65 points to 24,509.25.

Foreign Institutional Investors (FIIs) remained net buyers on Friday, acquiring shares worth Rs 1,506.12 crore, according to exchange data.

(With inputs from agencies.)