After losing its value for 8 consecutive days, the Indian currency rupee on Friday increased its value by 22 paise to reach 73.86 against the US dollar. Earlier in the day, the rupee opened at 74.10 against one dollar, lower in value than its closing rate of 74.08 on Thursday. The rupee went further down to 74.27 per dollar before bouncing back to reverse its 8-day trend of depreciation.
The strengthening of the rupee on Friday is a part of the broader trend of strengthening observed in other Asian currencies as well. The drop in global crude oil prices also led to the bounceback of the rupee since India is heavily dependent on oil imports.
Before Friday, the rupee had lost its value by 128 points as compared to the US dollar in the eight continuous days of decline.
The dollar index, which indicates the US Dollar’s value as against some other foreign currencies, was up by 0.05% on Friday to reach 91.93.
According to Dilip Parmar, a research analyst at HDFC Securities, aggressive selling of the US dollar by some foreign banks and some cash inflows on the back of IPO’s led to the strengthening of the Indian Rupee. He further added that the trend for the rupee’s valuation would be determined by the dollar index, crude oil prices and cash flow in the short run.
Meanwhile, the 50 share index Sensex closed in green territory on Friday after gaining 21.12 points or 0.04% to reach 52,344.45. The NSE’s Nifty closed in red after losing 8.05 points or 0.05% to reach 15,63.35. The FIIs net sold shares valued at Rs 879.73 crore on the Indian stock markets.
