The Indian rupee recorded a marginal recovery on Wednesday, opening at 94.70 per US dollar in early trade, supported by domestic investor activity. The uptick remained limited amid persistent global uncertainties, rising crude oil prices, and underlying strength in the US dollar.
In the foreign exchange market, the rupee was trading ber by 15 paise at 94.70 against the US dollar. The gain was constrained by global pressures, which prevented further appreciation despite initial support.
According to market participants, the marginal strengthening in the rupee reflects a mixed impact of domestic investor sentiment and fluctuations in international crude oil prices.
In the interbank foreign exchange market, the rupee opened at 93.62 per dollar, slightly improved from the previous session. However, after early gains, the currency pared some of its advances and stabilized at 94.70, compared with the previous close of 94.85, indicating a 15 paise recovery.
Market participants noted that the movement reflects a gradual recovery in the rupee, while continued strength in the dollar and global economic tensions are limiting further gains.
In the previous trading session on Monday, the rupee had crossed the 95 level for the first time, marking a record low. It later settled at 94.85 by the close. The foreign exchange market remained closed on Tuesday on account of Mahavir Jayanti, resulting in no interim data updates.
The dollar index declined by 0.13 percent to close at 99.63. The index measures the US dollar’s strength against a basket of six major currencies. The decline in the dollar index contributed to the rupee’s marginal recovery.
In the international market, Brent crude oil prices rose by 1.50 percent to $105.53 per barrel. Higher oil prices typically exert pressure on the rupee due to India’s significant import dependence on crude.
Market participants stated that maintaining stability in the rupee remains challenging amid rising oil prices and global economic uncertainties. Movements in the dollar and activity by foreign portfolio investors are also influencing currency fluctuations.
According to stock market data, foreign institutional investors sold equities worth Rs 11,163.06 crore on Monday. Such outflows exert pressure on the rupee as investors convert holdings into dollars, reducing demand for the domestic currency.
Market participants added that despite FII selling, domestic investors and banking institutions have helped maintain relative stability in the rupee.
The marginal recovery in the rupee has provided limited relief to domestic investors and traders. However, market participants indicated that continued global economic uncertainty and elevated oil prices could restrict further gains. Additionally, global dollar strength and geopolitical tensions, including those involving the US and Iran, remain factors influencing the currency’s trajectory.
