Mumbai, Oct 14 The rupee appreciated 44 paise to 94.92 against US dollar in early trade on Wednesday, supported by Reserve Bank of India interventions designed to ease near-term dollar demand and limit speculative foreign exchange exposure.
Forex traders said the USD/INR pair, which has gained nearly 2 per cent in the last three trading sessions, opened on a positive note on Wednesday, largely driven by regulatory measures implemented by the RBI to limit volatility and curb speculative trading.
A sustained move below the 95.00 threshold opens potential toward 94.50, but ongoing external macroeconomic pressures are likely to temper further gains, they said.
At the interbank foreign exchange market, the rupee opened at 95.05, then gained ground to touch 94.92, registering a gain of 44 paise over its previous close.
On Tuesday, the rupee strengthened for the third straight session and appreciated 42 paise to close at 95.36 against the US dollar.
Meanwhile, Finance Minister Nirmala Sitharaman on Tuesday said the rupee has depreciated “significantly” over the past year and a half, and the RBI will continue its efforts to prevent excessive volatility in the domestic currency.
The Reserve Bank over the weekend announced a slew of measures to stem rupee fall.
The central bank announced the creation of a special window for oil marketing companies, which will take the dollar demand away from the spot market and tightened rules governing forex derivatives trades to curb speculative bets against the rupee.
It also asked banks to maintain a 20 per cent reserve for dollar purchases of over USD 2 million.
The minister said most of the rupee’s volatility is stemming from external challenges, while the government is ensuring that macroeconomic fundamentals remain sound within the country.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.06 per cent at 102.11.
Brent crude, the global oil benchmark, was trading higher by 0.57 per cent at USD 106.29 per barrel in futures trade.
On the domestic equity market front, Sensex dipped 32.96 points to 73,000.82 in early trade, while the Nifty fell 32.65 points to 22,688.75.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,305.13 crore on a net basis on Tuesday, according to exchange data.
(PTI News)
