The Indian rupee strengthened in early trade on Friday, appreciating by 21 paise to Rs 87.75 against the U.S. dollar, helped by a softer greenback globally and likely intervention by the Reserve Bank of India (RBI). In the interbank foreign exchange market the rupee opened at Rs 87.91 and then gained ground to reach an early high of Rs87.75 against the dollar. Forex traders said that renewed foreign fund inflows and lower crude oil prices added to investor confidence and supported the currency’s move.
According to markets analyst Amit Pabari of CR Forex Advisors: “After weeks of drifting in uncertain waters, the currency now seems to have found a favourable current — buoyed by a softer US dollar, returning investor confidence, and the RBI’s steady hand at the helm.” Mr Pabari further noted that a break below Rs87.50 could open the way towards the Rs86.80-87.00 range, while on the other side, the Rs 88.30-88.40 zone acts as a strong resistance. Meanwhile, the dollar index which measures the greenback’s strength against a basket of major currencies was trading lower by around 0.16 % at 98.17. Brent crude oil futures were trading at around USD 60.90 per barrel (down 0.26 %) and Foreign Institutional Investors (FIIs) reportedly purchased equities worth around Rs997.29 crore on Thursday. Commerce & Industry Minister Piyush Goyal also remarked that India has implemented free trade agreements with several developed countries and is in active dialogue with the US, EU, Chile, Peru, New Zealand and Oman a factor that adds to India’s attractiveness as a trade and investment destination.