Rupee Gains 6 Paise to Settle at 95.39 Against US Dollar

The rupee recovered from early losses and gained 6 paise to close at 95.39 against the US dollar on Friday, supported by lower global crude oil prices and intervention by the Reserve Bank of India (RBI).

The local currency opened at 95.54 and remained volatile through the session, moving between 95.31 and 95.57 before settling at 95.39. The recovery came after the rupee had weakened to 95.45 against the dollar in the previous session.

Forex traders said the RBI's presence in the currency market helped prevent a sharper fall in the rupee. The central bank is believed to be stepping in to contain excessive volatility as pressure from a stronger US dollar and continued foreign fund outflows remains a concern.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Investments, the rupee recovered after slipping to around the 95.55 level during the forenoon session. He said stronger-than-expected inflows under the FCNR(B) scheme, which have crossed USD 65 billion, were also helping support the Indian currency.

However, the gains remained limited. The dollar index, which measures the US currency against a basket of six major currencies, was marginally higher at 99.21, while foreign institutional investors continued to pull money out of Indian equities.

Exchange data showed that FIIs sold shares worth Rs 298.26 crore on a net basis on Thursday, adding to pressure on the domestic currency.

A decline in crude oil prices, meanwhile, provided some relief. Brent crude fell 0.51 per cent to USD 89.24 per barrel, reducing concerns over India's oil import bill.

Domestic equity markets also ended higher, with the Sensex rising 330.92 points to 77,264.51 and the Nifty gaining 84.80 points to close at 24,175.65.

Markets are now expected to closely watch comments from US Federal Reserve Chair Kevin Warsh at the Jackson Hole Symposium, which could influence the dollar and global currency markets in the coming days.