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The rupee strengthened by 41 paise to close at over three-week high of 73.16 against the US currency on easing crude oil prices and a bullish trend in the domestic equity market.
On Tuesday, Saudi Arabia had pledged to meet any supply shortfalls and replace any looming shortages due to Iranian sanctions, which will start on November 4. Following this, Brent crude prices plunged to below $76 level before recovering to $76.03 per barrel.
Lower crude oil prices eased concerns over forex outflows and aided dollar selling by exporters. The greenback’s weakness against some currencies overseas also fuelled the rupee uptrend.
“The Indian rupee traded higher by 41 paise at 73.16 per dollar versus the previous close of 73.57 on the back of falling crude oil prices and on dollar selling by banks and exporters,” said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
At the Interbank Foreign Exchange (Forex) market, the rupee opened higher at 73.18, and further strengthened by 48 paise to touch a high of 73.09 on increased selling of the American currency by exporters and banks.
The domestic unit however pared some gains and ended strong by 41 paise at 73.16 against the US dollar, a level not seen since October 1. On Tuesday, the local currency had ended almost flat at 73.57 against the US currency.
The Sensex recaptured the 34,000-mark by gaining 187 points or 0.55 per cent higher at 34,033.96. The broader NSE Nifty too recovered by 77.95 points, or 0.77 per cent, to 10.224.75.
Domestic institutional investors (DIIs) made purchases worth Rs 116.41 crore, while foreign institutional investors (FIIs) sold shares to the tune of Rs 340.35 crore Tuesday, provisional data showed.
Financial Benchmark India Pvt Ltd (FBIL) set the reference rate for the rupee/dollar at 73.2645 and for rupee/euro at 83.9934. The reference rate for rupee/British pound was fixed at 95.0529 and for rupee/100 Japanese yen was 65.13.
Bond markets were also firm on easing fuel prices. The yield of most traded 10-year 7.17 per cent government security softened by 2 basis points to 7.87. The yield of 7.59 per cent government security maturing in 2026 softened by over 1 basis point to 7.94.
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