The Indian rupee rose 5 paise to 96.48 against the US dollar on Thursday as RBI intervention appeared likely, even as tensions between Iran and the United States remained high.
Crude oil prices touched $96 a barrel after the US launched fresh strikes on Iran. Foreign Institutional Investor (FII) outflows and negative sentiment in domestic equity markets added pressure on the local currency, though a weaker US dollar provided some relief.
At the interbank foreign exchange market, the rupee opened at 96.53 and climbed to 96.48 shortly after the stock market opened. The rupee had witnessed a continued fall on Wednesday, dropping 28 paise to close at 96.53 against the US dollar.
“State-owned banks were seen selling dollars — widely viewed as intervention on behalf of the RBI — around the 96.50 level. This prevented a steeper depreciation, but the rupee still closed lower on Wednesday. It remains near its all-time closing low, and if oil prices keep rising, we may see it crossing this level,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
The pressure on the rupee intensified as the US conducted its 12th round of military strikes on several civilian and energy infrastructure targets in Iran.
“The rupee is expected to move in the range of 96.50-96.65 in Thursday’s session, with risk tilted to the downside, although support from the RBI is likely to limit the losses. Key support levels would be at 96.10-95.80,” said Aamir Makda, Commodity & Currency Analyst, Technical Research, Choice Broking.
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