Rupee Gains 7 Paise To End At 75.65 On Easing Crude Prices

During the four-hour trading session, the domestic unit witnessed an intra-day high of 75.57 and a low of 75.76

Rupee Gains 7 Paise To End At 75.65 On Easing Crude Prices

Rupee gained 7 paise to end at 75.65

The rupee erased its initial losses to close 7 paise higher at 75.65 against the US dollar on Thursday tracking positive domestic equities, lower crude prices and foreign fund inflows. Forex traders said the rupee traded in a narrow range as gains in domestic equities, easing crude oil prices and foreign fund inflows supported the market, while strong US dollar and rising coronavirus cases weighed on investor sentiments. The rupee opened lower at 75.76 against the US dollar due to early losses in equities and a stronger dollar. During the four-hour trading session, the domestic unit witnessed an intra-day high of 75.57 and a low of 75.76.

The local unit finally settled at 75.65, higher by 7 paise over its previous close.

Meanwhile, the dollar index, which gauges the greenback''s strength against a basket of six currencies, rose 0.12 per cent to 97.26.

The 30-share BSE benchmark Sensex closed down by 26.88 points or 0.08 per cent at 34,842.10. The NSE Nifty slipped 16.40 points or 0.16 per cent to 10,288.90.

Foreign institutional investors were net buyers in the capital market as they bought shares worth Rs 1,766.90 crore on Wednesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 0.30 per cent to $40.19 per barrel.

"Rupee ended muted on inflows into local stocks and selling by exporters. Indian stocks swung between gains and losses on Thursday after the International Monetary Fund slashed its growth outlook for the country and forecast a deeper global recession," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.

The International Monetary Fund (IMF) projected that the global economy will shrink by 4.9 per cent this year, significantly worse than the 3 per cent drop it had estimated in its previous report in April. The IMF said that the global economic damage from the recession will be worse than from any other downturn since the Great Depression of the 1930s.

According to Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking, "although the impact of the corporate dollar inflows is evident, the overall bias for the rupee still lies towards depreciation".

Sachdeva further said that the rising number of virus cases in the US is a flagging risk, and Sino-US tensions will also keep the rupee bulls cautious.

"It seems like the RBI is protecting the rupee from appreciating above 74.80 to build reserves, that should also be a deterrent for a large-scale appreciation," she said.

Meanwhile, the number of cases around the world linked to the disease has crossed 94.40 lakh and deaths have topped 4.82 lakh.

In India, deaths due to COVID-19 rose to 14,894 and the number of infections spiked to 4,73,105, according to the health ministry.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.7087 and for rupee/euro at 85.7007. The reference rate for rupee/British pound was fixed at 94.7222 and for rupee/100 Japanese yen at 71.03.