Reversing a downward trend seen in the past three sessions, the rupee recovered by 17 paise to 63.96 against the US dollar in early trade on Monday, on fresh selling of the American currency by exporters. Besides, the dollar’s weakness against some currencies overseas and early gains in the domestic equity market supported the rupee. Including Monday’s gains, the rupee is up nearly 6 per cent against the greenback so far this calendar year. The rupee had closed at 64.13 per dollar on Friday.
During Friday’s session, it had fallen to a two-week low of 64.27 against the dollar amid foreign fund outflows due to selloff in the domestic equity markets..
The rupee has strengthened significantly this year and going forward it is expected to remain range-bound and average around 64.3 this fiscal year, according to global financial services major UBS. “Based on global/local macro and analysis of India’s external vulnerability, we expect the rupee to remain range-bound (62-66) over the next few months and average 64.3 in 2017-18 and 65.4 in 2018-19,” UBS said. (Read: Why rupee may average 64.3 per dollar in 2017-18)
The rupee has been among the top performing currencies in emerging markets.
Meanwhile, Indian equity markets started the week on a positive note with the Bombay Stock Exchange (BSE) benchmark index adding 250 points and the broader Nifty index gaining 83 points. Gains were led by metals, media, banking, pharma, auto and energy shares – up between 1 per cent and 2 per cent in morning deals.
Among the Nifty50 top gainers were Cipla, Adani Ports and SEZ, Tata Steel, HDFC, Eicher Motors and Vedanta – up between 2.1 per cent to 5 per cent.
(With inputs from PTI)