Rupee surges 21 paise to 75.53 against US dollar

Mumbai: Starting the financial year 2022-23 on a bullish note, the rupee spurted 21 paise to close at a one month-high of 75.53 against the US dollar on Monday, supported by a firm trend in domestic equities and foreign fund inflows.

At the interbank forex market, the local unit opened at 75.77 against the greenback and witnessed an intra-day high of 75.42 and a low of 75.79.

It finally ended at 75.53, registering a rise of 21 paise over its previous close.

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On Thursday, the last trading session of FY22, the rupee had advanced by 16 paise to close at 75.74.

The local unit, however, closed the 2021-22 fiscal with overall losses of 3.61 per cent or 264 paise against the American currency due to a stronger dollar and surging crude oil prices.

The forex market was closed on Friday for the annual account closing of banks.

Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.12 per cent to 98.75 on Monday.

Brent crude futures, the global oil benchmark, slipped 1.07 per cent to USD 103.27 per barrel.

On the domestic equity market front, the BSE Sensex ended 1,335.05 points or 2.25 per cent higher at 60,611.74, while the broader NSE Nifty surged 382.95 points or 2.17 per cent to 18,053.40.

Foreign institutional investors remained net buyers in the capital market on Monday as they purchased shares worth Rs 1,152.21 crore, according to stock exchange data.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said, the Indian rupee appreciated against the US dollar on Monday to a 5-week high supported by a rally in domestic equity markets.

“The domestic equity surged higher with India’s benchmark BSE Sensex equity index advancing 2.25 per cent following the announcement of the merger proposal of two domestic financial giants (which) boosted bets of a reversal in fund outflows from the nation’s risk assets,” he added.

Emerging market currencies and Asian peers were mixed against the dollar. However, crude oil prices remained volatile in Asian trade as the geopolitical uncertainty from the prolonged conflict in Ukraine persisted.

“Technically, if the USD-INR Spot pair trades below 75.59 levels it could pull the pair to the support zone at 75.39-75.23. However, a trade above could push the pair back to the resistance zone at 75.74-75.94,” he said.

The dollar index and the benchmark bond yields rose amid increased bets of a 50-bps rate hike by the US Fed in May.

Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services, said, “Rupee rose after consolidating in a narrow range for the past few sessions as global crude oil prices retraced from higher levels and as FIIs turned net buyers in the equity segment.”

“This week, focus will be shifting to the RBI policy statement and expectation is that the central bank could keep rates unchanged. Inflation remains a major concern for most central banks across the globe and investors expect that inflation could spin out of control and the RBI is already behind the curve on tackling inflation.

“We expect the USD-INR (Spot) to trade sideways and quote in the range of 75.50 and 76.20,” he added.

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