Rupee Rebounds 20 Paise to 96.53 Amid RBI Intervention and Oil Price Decline
The Indian rupee rebounded by 20 paise to settle at 96.53 against the US dollar on Friday, as market analysts attributed the recovery to likely intervention by the Reserve Bank of India (RBI).
According to forex traders, a combination of factors including heightened tensions in West Asia, FII outflows, and sustained negative sentiments at the domestic equity markets maintained pressure on the local unit. The rupee opened weaker at 96.81 and traded in the range of 96.30-96.81 before eventually settling at 96.53.
Market experts pointed to reports of RBI intervention as a key factor in stabilizing the rupee, with V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, stating that 'there are reports of RBI intervention to prevent further depreciation of the rupee.' PSU banks were also reported to have sold dollars to stabilize the rupee.
The global market saw Brent crude prices decline by 3.57% to USD 97.10 per barrel in futures trade, which may help the rupee to stabilize if crude declines next week. However, analysts expect the rupee to trade with a negative bias on further escalation of tensions between the US and Iran.
Foreign Institutional Investors offloaded equities worth Rs 3,892.77 crore on a net basis on Friday, adding pressure on the rupee.