The Indian rupee closed weaker against the US dollar on Thursday, amid stabilising crude prices and month-end dollar demand.
The rupee depreciated by 4 paise to close at 83.64 against the US dollar, according to Bloomberg data.
Stocks in Asia extended their rally on Thursday as traders were still digesting the China stimulus package, while eyeing the upcoming US GDP data. The gain in the region came after a mix trade on Wall Street as investors assessed the housing-market data.
While the fundamentals look "bright and shining", the domestic currency's performance hasn't kept pace, said Amit Pabari, managing director at CR Forex Advisors.
This reversal was largely due to RBI intervention and increased month-end dollar demand, he said. "The USDINR pair consistently finds firm support around 83.50, struggling to sustain levels below this mark."
Oil prices edged lower by 1.63% to $72.26, following their largest decline in two weeks, as factions in Libya reached a compromise on leadership for the central bank, paving the way for a potential return of some crude production. Meanwhile, the US dollar was down 0.02% at 100.90.
"We recommend hedging short-term imports at the opening rate," stated Pabari. "The USDINR is expected to find strong support at 83.50, with potential to rebound toward 83.75–83.80, offering another selling opportunity for those who missed out at similar levels before."
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