Rupee slips by 4 paise to 72.97 on dollar demand

The rupee dropped by 4 paise to close at 72.97 against the U.S. currency on February 8 due to a strong dollar sentiment and dollar buying by importers.

However, sustained foreign fund inflows and strong gains in equity markets restricted the rupee’s fall, traders said.

At the Interbank Foreign Exchange (forex), the rupee opened sharply higher at 72.86 against the dollar. During the session, the unit touched a high of 72.80.

However, the rupee pared gains to close lower by 4 paise at 72.97 due to dollar buying by importers. On Friday, the rupee had appreciated by 3 paise to close at 72.93 against the U.S. dollar.

After touching a lifetime high of 51,523.38 during the day, the 30-share BSE index ended 617.14 points or 1.22% higher at its record closing peak of 51,348.77.

The broader NSE Nifty surged 191.55 points or 1.28% to its record 15,115.80.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, surged 0.25% to 91.91.

Foreign portfolio investors (FPIs) were net buyers in the capital market as they purchased shares worth ₹1,461.71 crore on Friday, as per exchange data.

Meanwhile, the global oil benchmark Brent crude spiked 0.69% to $59.97 per barrel.

“The Indian rupee ended marginally weak against the U.S. currency, as rumoured buying from the Reserve Bank of India and rebound of the U.S. Dollar this Monday outweighed the impact of positive regional cues,” Sriram Iyer, Senior Research Analyst at Reliance Securities, said.

Following the RBI’s intervention, the one-year forward premium jumped to ₹3.70 this Monday, the highest since October 2016, while the implied yield rose to 5.07%, the highest since May 2017, he added.

“On the international front, the U.S. Dollar was higher against major currencies on Monday afternoon session in Asia as traders waited for more data on the U.S. economy,” Mr. Iyer said.

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