Rupee Recovers Ground As Markets Rally, Crude Eases And Dollar Weakens

At the interbank foreign exchange, the local unit opened at 86.16 against the greenback and traded in the range of 85.94-86.24 before closing at 86.03 (provisional), up 8 paise from its previous close

The dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.20 per cent to 97.98.

Source : Freepik

The rupee rose 8 paise to 86.03 (provisional) against the US dollar on Monday amid a strong show at the domestic equity markets, weakening dollar, and easing of global crude oil prices.

However, decline in exports, along with foreign fund outflows, capped further gains in the local unit, forex traders said.

At the interbank foreign exchange, the local unit opened at 86.16 against the greenback and traded in the range of 85.94-86.24 before closing at 86.03 (provisional), up 8 paise from its previous close.

The rupee had plummeted 59 paise to 86.11 against the US dollar on Friday.

The rupee regained, "but there was good dollar buying at lower levels as markets awaited the outcome of the continuing Iran-Israel war in the Middle East", Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said, adding that the rupee level could be in a wider range of 85.75 to 86.50 on Tuesday.

India's exports declined 2.17 per cent to USD 38.73 billion in May, while trade deficit stood at USD 21.88 billion in the month, the latest government data showed on Monday.

Imports declined 1.7 per cent year-on-year to USD 60.61 billion in May.

Wholesale price inflation (WPI) in the country declined to 0.39 per cent in May as prices of food articles, manufactured products, and fuel eased, as per government data.

WPI-based inflation was 0.85 per cent in April. It was 2.74 per cent in May last year.

Meanwhile, in the domestic equity market, the 30-share BSE Sensex jumped 677.55 points to settle at 81,796.15 while Nifty climbed 227.90 points to 24,946.50.

The prices of Brent crude -- the global oil benchmark -- dipped 0.79 per cent to 73.64 per barrel in futures trade after rising sharply over the past few days owing to the escalating Israel-Iran conflict.

The dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.20 per cent to 97.98.

India's forex reserves increased USD 5.17 billion to USD 696.65 billion for the week ended June 6, the Reserve Bank of India said on Friday.

Foreign institutional investors (FIIs) offloaded equities worth Rs 1,263.52 crore on a net basis on Friday, according to exchange data. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)