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The rupee made a smart recovery on Friday, closing below 83 to the dollar as the central bank is believed to have intervened in the market. Dollar inflows from exporters also supported the rupee.
The Indian unit closed 28 paise stronger at 82.94 per dollar against previous close of 83.22, which was an all-time closing low.
“The rupee weakness continued this morning and opened at 83.14 amid higher crude and global dollar strength.
“However, positive sentiments in domestic equities and likely RBI intervention at higher levels helped the rupee strengthen in the second half of the session,” IFA Global said in a report.
The rupee traded in a broad range of 83.17 to 82.905 with a major strengthening bias as it concluded at 0.4 per cent stronger. IFA Global noted that DXY (Dollar Index) continues to trade higher at 105 post better-than-expected initial jobless claims data from the U.S.
Anindya Banerjee, Vice President, Kotak Securities, attributed the rupee’s strength to likely heavy intervention from the central bank and some corporate inflows.
“Over the past one week, we think RBI has been very active in defending the rupee and preventing from climbing past 83.30 mark, the all-time high.
“Over the next one week, US CPI and the trend in the Chinese currency will set the tone. We expect a broad range of 82.70 and 83.30 on spot,” Banerjee.
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