The Indian rupee ended 77 paise higher at 70.69 against the US dollar on Thursday. It had opened at 71.12/dollar on and hit a high of 70.68. It was the rupee's seventh straight session of gains rising 220 paise during the time. The forex market is closed today on account of Guru Nanak Jayanti. It was also closed on Wednesday for the occasion of Eid-e-Milad.
Here are seven things you need to know about the rupee's improvement:
- Thursday's close was the rupee's longest gaining streak in 18 months.
- The rupee closed at a near three-month high against the dollar.
- Traders believe that the improvement in valuation is a result of increased selling of the greenbacks by exporters and banks. The US dollar has weakened against the 6 prominent overseas currencies that it is weighed against (the dollar index).
- Global oil benchmark Brent crude fell to its lowest for the year 2018 at $61.52 a barrel today. The waiver received from the US on its sanctions on Iranian imports of oil also helped ease the pressure.
- As for the foreign funds, Rs 446.24 crore was received by the capital markets on a net basis on Thursday. Domestic institutional investors bought shares worth Rs 49.68 crore, according to the provisional data available.
- The Indian rupee is now one of the top three best-performing currencies amoung the emerging economies.
- The Reserve Bank of India (RBI) had been continuously depleting its dollar reserves for close to seven months to help the local currency from plummeting after the emerging market crisis and increase in oil prices. The rupee had hit its new all-time low of Rs 74.48 against the dollar on 11 October. However, according to an estimate by the Standard Chartered Bank, the RBI may have bought $500 million in the first week of November. It may continue to do so to build its dollar reserves.