Rupee ends 6 paise lower against dollar on crude price rise

The Indian rupee depreciated by 6 paise to close at 71.03 against the US dollar on Thursday as steady rise in crude oil prices weighed on investor sentiment.

Forex traders said the Indian unit ended on a weak note as importers rushed for hedging amid expectations of intervention by the central bank.

At the interbank foreign exchange market, the local currency opened on a weak note at 71.01 and fell further to a low of 71.18. It finally settled at 71.03, lower by 6 paise against its previous close.

On Wednesday, the local unit had settled at Rs 70.97 against the greenback.

“Indian rupee opened on a weak note and fell against the dollar as importer rushed for hedging and expectation of central bank intervention. Further steady rise in crude oil prices also weighed on rupee,” said V K Sharma, Head - PCG & Capital Market Strategy, HDFC securities.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.14 per cent to 97.26.

On the domestic market front, the 30-share BSE Sensex settled 115.35 points, or 0.28 per cent, higher at its fresh closing record of 41,673.92. Similarly, the broader NSE Nifty rose 38.05 points, or 0.31 per cent, to its new peak of 12,259.70. It hit an intra-day high of 12,268.35.

“Rupee opened on a flat note but was weighed down in the latter half of the session following suspected RBI intervention. Volatility for the currency could remain low ahead of the important GDP number that will be released from the US,” said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services Private Ltd.

Somaiyaa further said that “expectation is that the growth number could remain unchanged in Q3 compared to the previous quarter but a surprise number on the upside could support the dollar at lower levels“.

Foreign institutional investors (FIIs) remained net buyers in equities, as they purchased shares worth Rs 1,836.81 crore on a net basis, according to provisional exchange data.

Brent futures, the global oil benchmark, soared 0.11 per cent to USD 66.24 per barrel.

The 10-year government bond yield was at 6.75 per cent.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.0611 and for rupee/euro at 79.1370. The reference rate for rupee/British pound was fixed at 93.1284 and for rupee/100 Japanese yen at 64.93.