Mumbai, Aug 3 : The rupee surged 31 paise to 95.12 against the US dollar in early trade on Monday over a steep fall in global crude oil prices and a softer greenback after US President Donald Trump decided to hold off strikes against Iran.
FII inflows, a rise in the country’s forex reserves, and Reserve Bank of India (RBI) support further strengthened the local unit, according to forex traders.
At the interbank foreign exchange, the rupee opened at 95.15 against the greenback before rising further to 95.12, up 31 paise from its previous close.
The rupee stayed in positive territory for the fifth consecutive day on Friday, gaining 7 paise to settle at 95.43 against the US dollar.
US President Donald Trump on Sunday said he decided to hold off on ordering American forces to carry out new strikes against Iran at the urging of Gulf allies Qatar, Saudi Arabia, and the United Arab Emirates.
The president added that a plan was in place for the US forces to carry out “the biggest attack since World War II” on Sunday. However, he decided to scrap the plan and give diplomacy more time to play out after hearing from key Gulf leaders — including Saudi Crown Prince Mohammed bin Salman — as well as at the request of unnamed Iranian officials.
“The rupee was supported by lower Brent crude oil prices, a weaker dollar, and sustained foreign portfolio inflows, and continued RBI presence in the foreign exchange market on Friday,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
“As Brent oil prices fell to USD 84 per barrel after Trump delayed strikes on Iran, the rupee opened at 95.15 on Monday and is expected to trade in the range of 95.00-95.50,” he said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.17 per cent lower at 99.74.
Brent crude futures, the global oil benchmark, were trading 5 per cent lower at USD 83.66 per barrel.
On the domestic equity market front, the Sensex jumped 470.06 points to 78,564.70 in early trade, while Nifty climbed 150 points to 24,532.95.
Foreign Institutional Investors purchased equities worth Rs 277.48 crore on a net basis on Friday, according to exchange data.
The RBI data released on Friday showed that the country’s forex reserves jumped USD 6.118 billion to USD 682.354 billion during the week ended July 24. In the previous reporting week, the overall reserves had increased USD 1.08 billion to USD 676.237 billion.
The central government’s fiscal deficit stood at 18.2 per cent of the full-year target at the end of June, according to data released by the Controller General of Accounts (CGA) on Friday. ( PTI )
