Rupee Gains Marginal Value Amid Rising Crude Prices

The Indian rupee gained 3 paise to settle at 83.87 against the US dollar on Monday, driven by gains in domestic markets and a weak dollar. However, a surge in crude oil prices capped further gains. Forex reserves saw an increase, while the domestic equity markets also rose.

The Indian rupee gained 3 paise to settle at 83.87 against the US dollar on Monday, despite an initial surge in crude oil prices.

According to Forex traders, the local currency appreciated in the morning session due to a rise in domestic markets and a weaker US dollar. However, the increment was limited by a surge in crude oil prices.

In the interbank foreign exchange market, the rupee opened at 83.83 and fluctuated, reaching an intra-day high of 83.80 and a low of 83.91 before closing at 83.87, marginally higher than its previous close of 83.90 last Friday.

The dollar index, indicating the greenback's strength against a basket of six currencies, rose to 100.78, reflecting a 0.07 per cent increase. This followed a sharp correction and a drop to its lowest level since July 2023 after dovish comments from Fed Chair Jerome Powell at the Jackson Hole Symposium.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, stated, "We expect the rupee to trade with a slight positive bias amid dovish Fed stance and rising expectations of a rate cut by the Fed in September. However, geopolitical tensions in the Middle East and rising crude oil prices may limit sharp gains." Brent crude rose by 0.92 per cent to USD 79.75 per barrel.

Domestic equity markets saw positive movements. The Sensex surged by 611.90 points to close at 81,698.11, while the Nifty gained 187.45 points to end at 25,010.60.

Foreign Institutional Investors (FIIs) were net buyers on Monday, purchasing shares worth Rs 483.36 crore. Additionally, India's forex reserves increased by USD 4.546 billion to USD 674.664 billion during the week ending August 16, after a previous week's drop of USD 4.8 billion.

(With inputs from agencies.)