Rupee Closes Stronger Against Dollar Amid MSCI Rejig-Related Inflows
The local currency appreciated 8 paise to close at 83.87 after opening at Rs 83.92, according to Bloomberg data.
The Indian rupee strengthened against the US dollar on Thursday amid expectation of foreign fund inflows owing to a change in the MSCI index.
However, the broader decline among most Asian currencies and month-end dollar demand from importers continued to weigh on the rupee. But intervention by the Reserve Bank of India through dollar sales by state-run banks will keep the local currency from breaching the critical psychological level at Rs 84.
The local currency appreciated 8 paise to close at 83.87 after opening at Rs 83.92, according to Bloomberg data. It had closed at Rs 83.96 on Wednesday.
The dollar index, which tracks the performance of the greenback against a basket of 10 leading global currencies, was 0.08% up at 101.18 at 3:34 p.m. IST.
The rupee is in the middle of a tug-of-war between positive and negative factors, said Amit Pabari, managing director at CR Forex Advisors.
However, he indicated potential for optimism further down the week. "Up to $3 billion in inflows are expected due to changes in the MSCI index, which tracks emerging market equities. Adani Enterprises is likely to launch an Rs 800 crore public bond issue, while SBI has successfully raised Rs 7,500 crore through a Tier II bond issue."
"Foreign investors have offloaded Rs 1,347 crore worth of Indian equities, intensifying the downward pressure," he said.
International benchmark Brent crude oil was 0.37% down at $77.27 at 3:37 p.m. IST.
International benchmark Brent crude oil was 0.11% up at $78.74 after prices stabilised post a two-day decline, as losses in the stock market balanced out reductions in US stockpiles and supply disruptions in Libya.