After days of the rupee touching all-time lows, it rebounded to rise 4 paise on Friday to close at 88.72 against the US dollar as it tracked a weak greenback against major currencies and a drop in global crude oil prices.
Unabated foreign capital outflows and risk-off sentiment in the domestic equity market prevented a sharp rise in the local unit, while hopes of a breakthrough in the India-US trade talks supported the domestic currency, according to forex traders.
At the interbank foreign exchange, the rupee opened at 88.72 and traded in a narrow range of 88.67-88.74 before settling at 88.72, 4 paise higher than its previous close.
The rupee had slipped 1 paisa to close at a fresh lifetime low of 88.76 against the American currency on Thursday.
"The Reserve Bank of India seems to have intervened heavily in the morning, allowing an opening of 88.68 for the rupee...Tariffs have been responsible for the constant fall in indices and rupee with Trump imposing 100 per cent tariffs on pharma, furniture and trucks," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
Also Read: Rupee recovers 2 paise from all-time low
The rupee is expected to remain in the range of 88.50-89.00 on Monday, he added.
Meanwhile, India and the US have decided to continue their engagements to achieve an early conclusion of a mutually beneficial trade pact, according to the Commerce Ministry.
"The rupee has stabilised after a volatile week, with the consolidation phase being driven by central bank intervention to meet the month-end dollar demand. While this action provided a much-needed pause, the rupee is not yet out of the woods and remains vulnerable to lingering concerns over US trade tariffs," Dilip Parmar, Research Analyst, HDFC Securities, said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.19 per cent lower at 98.37.
Brent crude, the global oil benchmark, was trading 0.39 per cent lower at USD 69.15 per barrel in futures trade.
On the domestic equity market front, Sensex tanked 733.22 points to settle at 80,426.46, while Nifty was down 236.15 points to 24,654.70.
Foreign Institutional Investors offloaded equities worth ₹5,687.58 crore on Friday, according to exchange data.
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