Indian Rupee Gains 6 Paise to 89.92 Against US Dollar in Early Trade
The Indian Rupee strengthened by 6 paise to 89.92 against the US dollar during early Friday trade, recovering from previous session's decline. Market experts expect range-bound movement between 89.80-90 with RBI intervention protecting key levels, while positive domestic equities offset continued foreign fund outflows and GST collections showed 6.10% growth.
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The Indian Rupee witnessed a modest recovery, appreciating by 6 paise to 89.92 against the US dollar during early trade on Friday. The currency's movement occurred amid thin liquidity conditions that accentuated everyday demand-supply imbalances, though it managed to gain ground from the previous session's close.
Currency Performance and Market Dynamics
At the interbank foreign exchange market, the rupee opened at 89.95 against the US dollar before strengthening to touch 89.92. This represented a recovery from Thursday's performance when the currency depreciated 10 paise to close at 89.98.
| Parameter: | Value |
|---|---|
| Opening Level: | 89.95 |
| Intraday High: | 89.92 |
| Previous Close: | 89.98 |
| Daily Change: | +6 paise |
Forex traders indicated that the dollar-rupee pair is expected to trade within a narrow range, with the Reserve Bank of India actively protecting the 90 level. The support from positive domestic equities was offset by sustained foreign institutional investor outflows.
Expert Analysis and Outlook
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, noted that unless the RBI intervenes heavily by selling dollars, movements will likely remain within small ranges. He projected the currency pair to remain in a holding pattern between 89.80 and 90, considering the recent narrow trading range observed over the last three sessions.
Bhansali highlighted that corporate demand, foreign portfolio investor demand, and government demand have been the salient features affecting the rupee over the past year. During this period, the currency fell by more than 5.00% and became the worst-performing Asian currency, though it remained partly protected by RBI interventions.
Global Market Context
The dollar index, which measures the greenback's strength against a basket of six currencies, was trading marginally down by 0.15% at 98.17. Brent crude, the global oil benchmark, was trading 0.38% higher at $61.08 per barrel in futures trade.
Amit Pabari, MD of CR Forex Advisors, suggested that with early-year liquidity remaining thin and domestic fundamentals offering a mixed but stable backdrop, the rupee appears set to remain range-bound in the near term. He projected USD/INR to trade in a 89.30-90.20 range, noting that as long as the pair stays below the 90 handle, the balance of risks tilts mildly in favor of the rupee.
Domestic Market Performance
Domestic equity markets provided some support to the currency, with the 30-share benchmark Sensex climbing 158.19 points to 85,346.79 in early trade. The Nifty gained 55.80 points to reach 26,202.35.
| Market Index: | Level | Change |
|---|---|---|
| Sensex: | 85,346.79 | +158.19 points |
| Nifty: | 26,202.35 | +55.80 points |
However, foreign institutional investors continued their selling pressure, offloading equities worth ₹3,268.60 crore on Thursday, according to exchange data.
Economic Indicators
On the macroeconomic front, gross GST collections provided a positive backdrop, rising 6.10% to over ₹1.74 lakh crore in December, compared to over ₹1.64 lakh crore in the previous December. The growth came despite slow revenue expansion from domestic sales following sweeping tax cuts, according to government data released on Thursday.
| GST Collections: | Amount |
|---|---|
| December (Current): | ₹1.74 lakh crore |
| December (Previous): | ₹1.64 lakh crore |
| Growth Rate: | 6.10% |
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