4 days ago
Rupee Gains as Oil Prices Fall, RBI Supports Currency
The rupee became slightly stronger against the US dollar on Friday.
It finished at 95.39 rupees for one dollar.
Cheaper oil helped support the rupee.
The Reserve Bank of India also stepped in to prevent a large fall.
However, a stronger dollar made it harder for the rupee to rise.
Money leaving Indian markets also put pressure on the currency.
Traders are watching a speech by Kevin Warsh at the Jackson Hole Symposium.
The rupee moved up only a little because positive and negative forces balanced each other.
The rupee rose 6 paise to settle at 95.39 against the US dollar on Friday.
Lower global crude oil prices and Reserve Bank of India intervention supported the rupee.
A stronger dollar and foreign institutional investor outflows limited the currency’s gains.
The rupee traded between 95.31 and 95.57 during the session.
Markets are watching US Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole.
- Who
- The Indian rupee, the Reserve Bank of India, foreign institutional investors, and currency traders were involved.
- What
- The rupee rose 6 paise against the US dollar to settle at 95.39.
- Where
- The trading took place in the interbank foreign-exchange market in Mumbai.
- When
- Friday; the market also focused on an upcoming speech at the Jackson Hole Symposium.
- Why
- Lower global crude oil prices, RBI intervention, and strong FCNR(B) flows supported the rupee, while a stronger dollar and FII outflows pressured it.
Factors Supporting the Rupee
Factors Pressuring the Rupee
Market drivers
Factors Supporting the Rupee
Falling global crude oil prices and intervention by the Reserve Bank of India helped the rupee strengthen.
Factors Pressuring the Rupee
A marginally stronger US dollar and foreign institutional investor outflows kept the rupee under pressure.
Capital flows
Factors Supporting the Rupee
Better-than-expected flows under the FCNR(B) scheme, which crossed $65 billion, contributed to rupee strength.
Factors Pressuring the Rupee
Continued FII outflows limited the currency’s gains during the session.
Key facts
- Closing rate
- 95.39 rupees per US dollar
- Daily change
- The rupee gained 6 paise
- Trading range
- 95.31 to 95.57 per US dollar
- Opening rate
- 95.54 per US dollar
- Dollar index
- 99.21, up 0.06 per cent
- FCNR(B) flows
- The scheme’s flows crossed $65 billion
- Key market event
- Traders are monitoring Kevin Warsh’s speech at the Jackson Hole Symposium
Quotes
V K Vijayakumar
Chief Investment Strategist at Geojit Investments Ltd
“Rupee appreciated from the forenoon trades where it had dipped to 95.55 level. RBI is intervening in the market to stem any significant depreciation in rupee. Better-than-expected flows under the FCNR(B) scheme, which has crossed $65 billion is contributing to the strength in the rupee”
thehansindia.com
Sources
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