Rupee jumps 18 paise to close at 83.11 against U.S. dollar

File Photo | Photo Credit: REUTERS

The rupee rallied for the fourth consecutive trading session on May 24 and appreciated by 18 paise to settle at 83.11 (provisional) against the U.S. dollar on fresh foreign fund inflows and suspected intervention by the RBI.

Forex traders attributed the rally to ₹2.11 lakh crore record dividend by the RBI to the government for the fiscal ended March 31. It was more than double the budgeted expectation, helping shore up revenue ahead of a new government taking office.

At the interbank foreign exchange, the domestic unit opened at 83.26 and moved in the range of 83.03 and 83.26 against the greenback during the session.

The local unit finally settled at 83.11 (provisional) against the dollar, registering a rise of 18 paise from its previous close. In the last four trading sessions the local unit has added 39 paise against the American currency.

The forex market was closed on May 23 on account of 'Buddha Purnima'.

On Wednesday, the rupee appreciated by 2 paise to settle at 83.29 against the U.S. dollar.

"The Indian rupee gained on suspected intervention by the Reserve Bank of India (RBI). The RBI's ₹2.11 lakh crore dividend to the government also boosted market sentiments.

"Fresh FII inflows and a decline in crude oil prices also supported the rupee. The U.S. dollar strengthened as markets trimmed rate cut bets amid hawkish U.S. data and hawkish Federal Open Market Committee (FOMC) meeting minutes," said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.22% to 104.88.

Brent crude futures, the global oil benchmark, slipped 0.70% to $80.79 per barrel.

"We expect the rupee to trade with a positive bias on positive domestic equities and overall weakness in crude oil prices. However, weak global markets and strong dollar on hawkish U.S. data may cap sharp gains," Mr. Choudhary said.

Traders may take cues from durable goods orders and revised consumer sentiment data from the U.S. USD-INR spot price is expected to trade in a range of ₹82.80 to ₹83.30, Mr. Choudhary added.

On the domestic equity market front, benchmark equity indices scaled new peaks in intra-day trade before ending flat.

The 30-share Sensex declined 7.65 points, or 0.01%, to settle at 75,410.39 points, and Nifty fell 10.55 points, or 0.05%, to close at 22,957.10 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on May 23, as they purchased shares worth ₹4,670.95 crore, according to exchange data.