The rupee on Friday rose by 18 paise to 96.18 against the US dollar in early trade, following a decline in crude oil prices in the previous trading session, signs of easing geopolitical tensions, and active RBI intervention.
Forex traders said markets found some relief after comments from US Secretary of State Marco Rubio hinted that diplomatic talks linked to the Iran situation were moving in a constructive direction.
Although he warned that he does not want to be "overly optimistic", the comments were enough to calm markets temporarily.
As a result, Brent crude oil, which hovered around $110 per barrel for one week, has come down to the $104 mark, reducing immediate pressure on the rupee, traders said.
At the interbank foreign exchange market, the rupee opened at 96.30 against the US dollar, then touched 96.18 in early trade, up 18 paise from its previous close.
On Thursday, the rupee staged a sharp comeback of nearly 50 paise from its all-time closing low to settle at 96.36 against the US dollar."
Another major reason behind the rupee's recovery is growing confidence around the RBI's planned USD 5 billion buy-sell swap auction on 26th May.
The move is expected to inject more rupee liquidity into the banking system and improve RBI's ability to manage excessive currency volatility," CR Forex Advisors MD Amit Pabari said.
Brent crude, the global oil benchmark, was trading up 1.59 per cent at USD 104.21 per barrel in futures trade.
Follow us
