Gains in equities lift Indian rupee against UAE dirham in early trade

A strong American currency overseas and forex outflows restricted the rupee’s gain


A Staff Reporter

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Published: Mon 18 Jul 2022, 9:36 AM

The Indian rupee appreciated six paise to 79.76 against the US dollar (21.73 versus the UAE dirham) in early trade on Monday as a positive trend in Indian equities supported the rupee.

However, a strong American currency overseas and forex outflows restricted the rupee’s gain, dealers said.

At the Indian interbank foreign exchange, the rupee opened at 79.76 against the American dollar, registering a gain of six paise over the last close.

In initial deals, the rupee witnessed an early high of 79.72 and a low of 79.81 against the American currency.

The rupee on Friday rebounded from the near-80 levels to close higher by 17 paise at 79.82 against the US currency.

“RBI (Reserve Bank of India) may protect the level of 80 for some more time before it can allow a break of the same. The trade deficit is very high for the rupee to sustain while importers/debt companies will keep buying dollars to pay off their payables,” said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors.

Bhansali said: "Flows have not resumed and FPIs are still sellers in the stock market, though the intensity has come down. India may be the highest growth country amongst the big-sized markets and with good rainfall, demand could be good enough. RBI may hike rates of interest to attract flows but let growth continue.”

On the Indian equity front, the 30-share Sensex was trading 381.25 points or 0.71 per cent higher at 54,142.03, while the broader NSE Nifty advanced 136.35 points or 0.85 per cent to 16,185.55.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.26 per cent to 107.77.

Global oil benchmark Brent crude futures rose 0.71 per cent to $101.88 per barrel.

Foreign institutional investors remained net sellers in the capital market on Friday, offloading shares worth Rs16.49 billion, as per exchange data.

(With inputs from PTI)

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