Following widespread decline in crude oil prices and new foreign capital inflows, the rupee rebounded from an all-time low of 80.06 to end 20 paise higher at 79.85 (provisional) versus the US dollar on Thursday. On the interbank forex market, the local currency began lower at 80.03 per dollar and dropped further to an intraday low of 80.06. Later, the local unit recovered losses and finished at 79.85 (provisional), up 20 paise from its previous closing.

Due to high dollar demand from importers and fears about fiscal slippage, the rupee fell below the 80-level versus the US currency for the first time on Wednesday.

The dollar index, which measures the strength of the greenback against a basket of six currencies, was 0.04 percent down at 107.03.

“After the last four days’ underperformance, Indian Rupee becomes the second best-performing currency among Asian currencies on probable dollar selling by state banks on behalf of central banks and mild foreign fund inflows.

“All eyes will be on the European Central Bank (ECB) meeting, which will impact the dollar index. With the Euro holding the major weight in the dollar index, any unexpected outcome from the meeting will be dollar positive and in turn, weigh on other currencies,” said Dilip Parmar, research analyst, HDFC Securities.

The BSE sensex finished 284.42 points or 0.51 percent higher at 55,681.95, while the wider NSE Nifty climbed 84.40 points or 0.51 percent to 16,605.25.

According to exchange statistics, foreign institutional investors continued to be net buyers in the capital market on Wednesday, purchasing shares worth Rs 1,780.94 crore.

Source: ETAuto

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