Rupee Rises 20 Paise to 94.20 Against US Dollar in Early Trade

Mumbai: The rupee gained 20 paise to 94.20 against the US dollar in early trading on Friday on optimism that trade talks between India and the US will gain momentum. Forex traders said the rupee started on a positive note as oil prices remained supportive and foreign inflows improved. They said the overall trend for the rupee remains positive.

Separately, Indian Foreign Minister Vikram Misri said on Thursday that trade is a major topic of discussion between Prime Minister Narendra Modi and US President Donald Trump and both leaders have instructed their negotiators to finalize the proposed trade deal as soon as possible.

At the interbank forex market, the rupee opened at 94.30, then gained momentum and reached 94.20, gaining 20 paise from the previous all-time low close.

On Tuesday, the rupee gained 10 paise to 94.40 against the US dollar.

CR Forex Advisors MD – Amit Pabari said, “RBI is expected to use incoming dollar flows to rebuild forex reserves and gradually reduce its large forward dollar book, estimated at around USD 110 billion. Market participants believe that the central bank may have already purchased USD 3-5 billion in the last two sessions.” he said.

Pabari also said this was not a sign of concern. Rather, it reflects the RBI taking advantage of favorable market conditions. “However, such purchases may naturally slow down the rate of appreciation of the rupee, making the move stronger but more gradual,” he said.

Meanwhile, the dollar index, which measures the strength of the dollar against a basket of six currencies, was traded at 100.92 with an increase of 0.08 percent.

Global oil reference Brent crude oil was traded at $79.17 per barrel, down 0.85 percent in futures.

In the domestic equity market, Sensex fell 786.58 points to 76,624.90 points in early trade, while Nifty fell 210.95 points to 23,959.80 points.

Foreign institutional investors issued shares worth 1,025.20 billion rupees on a net basis on Thursday, stock exchange data showed.

Misri’s comments came a day after Modi and Trump held wide-ranging talks for the first time in 16 months on the margins of the G7 Summit in a bid to rebuild strained bilateral relations.

Misri said significant progress has been made in signing the interim trade agreement and US Trade Representative Jamieson Greer will visit India next week to advance talks.