Rupee trades in narrow range against U.S. dollar in early trade

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The rupee traded in a narrow range on Monday (September 9, 2024) and appreciated 1 paisa to 83.94 against the American currency, amid a muted trend in domestic equities.

Forex traders said easing crude oil prices and overall weakness in the dollar index supported the rupee, but the Reserve Bank’s active intervention kept the rupee in a tight range.

At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.96 against the American currency and touched 83.85 in initial trade. It was later trading at 83.95 against the greenback, unchanged from its previous close.

On Friday, the rupee gained 2 paise to close at 83.95 against the U.S. dollar.

The Indian rupee is expected to be range bound with the market awaiting to see when the Reserve Bank of India (RBI) would allow a move above 84.00.

“The RBI has been buying dollars is clearly indicated by the rise in reserves to 684 billion at the end of last month when all inflows flows were absorbed by them,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.10% to 101.28 points.

Brent crude, the international benchmark, gained 1.32% to $71.98 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex advanced 35.22 points, or 0.04%, to 81,219.15 points, while the Nifty was down 1.25 points, or 0.01%, to 24,850.90 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth ₹620.95 crore, according to exchange data.

Meanwhile, India’s forex reserves jumped by $2.299 billion to a new high of $683.987 billion for the week ended on August 30, according to the RBI data release on Friday.

In the previous reporting week, the forex reserves had jumped by $7.023 billion to a high of $681.688 billion.