The rupee surged 9 paisa to 83.10 vs the US dollar in early trade on Friday, supported by a weakening dollar against major rivals and bullish signs from global markets. However, massive selling of shares by foreign investors and an increase in crude oil prices prevented the growth of domestic currency, according to FX dealers. The Indian rupee opened strong at 83.13 against the US dollar, reaching a high of 83.09.
It later traded at 83.10 against the US dollar, up 9 paise from its previous close. The rupee closed 3 paise higher at 83.19 on Thursday. According to analysts, increased interest rates and US bond yields are causing foreign investors to continue selling in Indian capital markets, while the rupee has begun to rebound due to a considerable reduction in India’s current account deficit (CAD).
The CAD fell to USD 9.2 billion, or 1.1% of GDP, in the first quarter of the current fiscal year, from USD 17.9 billion (2.1%) a year before, according to the Reserve Bank of India on Thursday. Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, fell 0.19 percent to 106.02.
The global oil benchmark, Brent crude, was trading 0.05 percent higher at USD 95.43 per barrel. In early activity on the local equity market, the BSE Sensex rose 84.00 points, or 0.13 percent, to 65,592.32. The Nifty rose 37.75 points, or 0.2%, to 19,562.30. According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital market on Thursday, offloading shares worth Rs.3,364.22 crore.
