Mumbai, Mar 22 (PTI) The rupee pared its initial losses to settle flat at 76.18 (provisional) against the American currency on Tuesday, tracking a positive trend in domestic equities.
At the interbank foreign exchange, the rupee opened sharply lower at 76.39 against the US dollar. However, it recovered all its losses to closed at 76.18.
During the day, the local unit witnessed heavy volatility amid concerns over global oil supplies and saw an intra-day high of 76.10 and a low of 76.48.
On Monday, the rupee slumped 34 paise to close at 76.18 against the US dollar.
The depreciation in the rupee was capped as exporters rushed to sell the US currency after oil prices eased on speculation that talks to end the Ukraine conflict could lead to a breakthrough, Sriram Iyer, Senior Research Analyst at Reliance Securities, said.
A rebound in local equities, in line with a broader rise in regional shares and dollar inflows for a large public sector company also helped the local unit this Tuesday, Iyer added.
“A sharp run-up in oil prices in the morning, coupled with a spike in US yields caused USD/INR to aim for the resistance level of 76.50. However, selling from exporters and PSUs pulled the pair back below 76.20 on spot,” said Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
As oil prices reversed, equity markets rallied, Banerjee said, adding that “over the near-term, we expect USDINR to trade within a range of 75.80 and 76.50”.
Experts believe the volatility will persist till the war situation between Russia and Ukraine and crude price stabilise.
Global oil benchmark Brent crude futures fell 1.50 per cent to USD 113.18 per barrel.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.25 per cent to 98.74.
On the domestic equity market front, the 30-share Sensex ended 696.81 points or 1.22 per cent higher at 57,989.30, while the broader NSE Nifty advanced 197.90 points or 1.16 per cent to 17,315.50.
Foreign institutional investors remained net sellers in the capital market on Monday as they offloaded shares worth Rs 2,962.12 crore, according to stock exchange data. PTI DRR BAL BAL
