Rupee gains for 2nd straight session, closes 63 paise higher at 95.73 against dollar
New Delhi, May 22
The Indian rupee extended its recovery for a second consecutive trading session on Friday, appreciating 63 paise to close provisionally at 95.73 against the US dollar.
The domestic currency drew support from easing crude oil prices, positive sentiment in local equity markets and expectations of intervention by the Reserve Bank of India (RBI) to curb excessive volatility.
The rupee opened at 96.30 per dollar in the interbank foreign exchange market and witnessed sharp gains during the day.
It touched an intra-day high of 95.30 and a low of 95.68 before settling at 95.73. The latest rise comes after the currency had rebounded 50 paise on Thursday from its record closing low to end at 96.36 against the greenback.
"This recovery is largely attributed to the Reserve Bank of India's active intervention following its USD/INR buy-sell swap announcement, along with easing geopolitical tensions that have softened imported commodity prices," an analyst stated.
Forex market participants said investor sentiment improved after comments from US Secretary of State Marco Rubio suggested that diplomatic efforts related to the Iran situation were progressing in a constructive manner.
The remarks helped ease concerns over potential disruptions in global energy markets, offering relief to emerging-market currencies, including the rupee.
The domestic unit also benefited from a decline in US Treasury yields and strength in Indian equities.
Benchmark stock indices ended the session in positive territory, with the Sensex rising 231.99 points to close at 75,415.35 and the Nifty advancing 64.60 points to settle at 23,719.30.
Market analysts, however, cautioned that geopolitical developments remain a key risk for the currency.
"For now, the near-term trend has turned supportive for the rupee, with RBI intervention continuing to play a key role in controlling volatility and restoring confidence in the forex market," an analyst stated.
"Rupee range is expected between 95.00-95.90 in the near term," an analyst added.
— IANS
Reader Comments
Easing crude oil prices is the real credit here. ₹95.73 against USD may look okay for now, but let's not ignore that we're still in dangerous waters. Geopolitical tensions and global uncertainties are far from over. Stay cautious!
RBI intervention is a mixed blessing. Good to see stability, but artificial support can't last forever. Need stronger domestic manufacturing and export push — that's the real solution. Also, Marco Rubio's comments on Iran? Weirdly comforting for Indian currency!
As an exporter, I'm watching this closely. A volatile rupee makes pricing our goods abroad very unpredictable. While the recovery is welcome for importers, I hope RBI considers a balanced approach — not too strong, not too weak. Economy needs stability above all.
Great to see Sensex and Nifty up too! But doesn't change the fact that common people are feeling the pinch of inflation. 63 paise improvement is a drop in the ocean when essentials remain costly. Hope this trend sustains beyond just oil price fluctuations.
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