Rupee inches higher to 83.44 vs dollar

The rupee gained by 5 paise versus the US dollar in early Monday trade to reach 83.44, as the American currency and crude oil prices depreciated from their recent highs.

Forex traders noted that foreign fund inflows boosted investor sentiment, contributing to the rupee's strength.

At the interbank foreign exchange market, the rupee started at 83.45 and strengthened further to 83.44 against the dollar, marking a 5 paise increase from its previous close of 83.49 on Friday.

CR Forex Advisors MD Amit Pabari observed that the Reserve Bank of India (RBI) appears committed to preventing the rupee from falling below 83.70, despite pressure from elevated oil prices. He highlighted positive economic indicators such as stable inflation, record-high forex reserves by RBI, etc., and anticipated inflows, all supporting factors for the rupee.

"Overall, positive economic indicators such as a good growth rate, stable inflation, a reduced fiscal deficit, record-high RBI forex reserves, and a pipeline of inflows are all supportive factors that should ideally bolster the rupee," Pabari said, adding that given these factors, the rupee is expected to trade within a broad range of 83.20 to 83.70 levels.

Considering these factors, Pabari expects the rupee to trade in a broad range of 83.20 to 83.70 levels.

The dollar index, which measures the dollar against six major currencies, traded at 104.86, down 0.01% on Monday.

Brent crude futures, the global benchmark, slightly declined by 0.03% to USD 86.51 per barrel.

On the domestic front, the BSE Sensex dropped 174.57 points (0.22%) to 79,822.03 points, while the NSE Nifty fell 13.05 points (0.05%) to 24,310.80 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, purchasing shares worth Rs 1,241.33 crore.

India's forex reserves decreased by USD 1.713 billion to USD 651.997 billion for the week ended June 28, as reported by the RBI on Friday.

In the previous reporting period, reserves had decreased by USD 2.922 billion to USD 652.895 billion. The reserves had hit a peak of USD 655.817 billion on June 7 this year.

With inputs from agencies