Rupee surges 23 paise to close at 75.09 against USD

Rising for the second straight day, the rupee appreciated by 23 paise to close at 75.09 against the US dollar on Wednesday as easing of tensions between Russia and Ukraine helped lift risk appetite.

At the interbank forex market, the local unit opened at 75.24 against the greenback and witnessed an intra-day high of 74.96 and a low of 75.24. It finally settled at 75.07, a rise of 25 paise over its previous close.

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On Tuesday, the rupee had snapped its five-session losing streak and surged 28 paise to close at 75.32.

Global markets edged higher and crude oil prices slipped after Russia said it was withdrawing some troops from the Ukraine border, even as the US administration reiterated its commitment to respond "decisively" in case of a Russian attack.

US President Joe Biden has said the US is still open for diplomacy to resolve the issue.

The dollar index, which measures the greenback's strength against a basket of six currencies, fell 0.19 per cent to 95.80.

On the domestic equity market front, the BSE Sensex ended 145.37 points or 0.25 per cent lower at 57,996.68, while the broader NSE Nifty declined 30.25 points or 0.17 per cent to 17,322.20.

Brent crude futures, the global oil benchmark, was trading 0.80 per cent higher at USD 94.03 per barrel.

Foreign institutional investors were net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 2,298.76 crore, as per stock exchange data.

According to Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking, the rupee zoomed higher in Wednesday's trade as easing of tensions between Russia and Ukraine has helped lift risk appetite in the market.

"Softening of the greenback and decline in crude oil prices from multi-year highs amid waning geopolitical risk premium, also lent support to the rupee-dollar exchange rate," Sachdeva said.

Markets would now be closely eyeing the US Federal Reserve minutes to gauge the central bank's stance towards policy normalisation.

"We reckon that the 74.80 mark is still a strong hurdle for the Indian rupee and further appreciation can be seen only if it manages to hold above the same," Sachdeva noted.

The rupee appreciated for the second straight day against the US dollar, tracking gains in regional currencies as tension between Russian and Ukraine receded, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

However, foreign investors have pulled out a net USD 1.8 billion from Indian equities so far this month, after having taken out USD 4.8 billion in January, Iyer said.