Mumbai, Mar 21: The rupee appreciated 17 paise to 86.19 against the US dollar in early trade on Friday, tracking positive domestic equities and fresh foreign fund inflows.
Forex traders said the rupee has been gaining as FPIs turned net buyers for the second time during the week with respect to equity and have been buying heavily into debt.
At the interbank foreign exchange, the rupee opened at 86.26 against the greenback, then gained some ground and touched 86.19, up 17 paise from its previous close.
On Thursday, the rupee stayed firm and appreciated 1 paisa to close at 86.36 against the US dollar.
“On the domestic front, the Indian rupee experienced significant volatility, reacting to the US Fed’s meeting while drawing strength from strong FII inflows,” CR Forex Advisors MD Amit Pabari said.
Foreign institutional investors (FIIs) purchased equities worth Rs 3,239.14 crore on a net basis on Thursday, according to exchange data.
“After weeks of outflows, foreign investors injected over Rs 3,200 crore into Indian equities and a substantial Rs 5,500 crore into debt markets driven by higher India’s real yield standing at 3.028 per cent,” Pabari said.
Meanwhile, the US dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13 per cent higher at 103.98.
Brent crude, the global oil benchmark, was trading 0.44 per cent higher at USD 72.32 per barrel in futures trade.
“Given the current market dynamics, the USD-INR pair is expected to trade between 86.00 and 86.80 in the near term. However, with the current global headwinds a slight rebound towards the 86.50-86.60 range is expected,” Pabari added.
In the domestic equity market, the 30-share BSE Sensex was trading 158.79 points, or 0.21 per cent, higher at 76,506.85 points, while the Nifty was up 74.40 points, or 0.32 per cent, at 23,265.05 points. (PTI)
