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Inflow of foreign funds and the RBI’s announcement of giving a record dividend to the government for FY25 also added strength to the local currency, according to forex traders.
At the interbank foreign exchange, the rupee opened at 85.02 and strengthened further to 84.98 before trading at 85.05 against the greenback in initial deals, registering a sharp gain of 40 paise over its previous close.
The rupee appreciated sharply by 40 paise to 85.05 against the US dollar in early trade on Monday on the back of a weak American currency index and positive domestic equity markets.
Inflow of foreign funds and the RBI’s announcement of giving a record dividend to the government for FY25 also added strength to the local currency, forex traders said.
Besides, market participants will await the release of industrial and manufacturing production data for April as well as the Q1 GDP growth numbers, scheduled this week, that are likely to offer deeper insights into the country’s economic activity, according to analysts.
At the interbank foreign exchange, the domestic unit opened at 85.02 and strengthened further to 84.98 before trading at 85.05 against the greenback in initial deals, registering a sharp gain of 40 paise over its previous close.
On Friday, the rupee jumped 50 paise to close at 85.45 against the US dollar.
The steady gain in domestic unit was attributed to the global trend of selling dollar and rising yields of American long-term bonds amid global trade-related uncertainties.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.34 per cent at 98.67.
Brent crude, the global oil benchmark, rose 0.32 per cent to USD 64.99 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex advanced 630.68 points, or 0.77 per cent, to 82,351.76, while the Nifty rose 187 points, or 0.75 per cent, to 25,040.15.
Foreign institutional investors (FIIs) purchased equities worth Rs 1,794.59 crore on a net basis on Friday, according to exchange data.
The Reserve Bank of India’s latest weekly data released on Friday showed India’s forex reserves dropped $4.888 billion to $685.729 billion for the week ended May 16.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)
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