Rupee Rise Against the US Dollar: Key Market Insights

Rupee Rise Amidst Dollar Weakness

The rupee appreciated by 5 paise to 83.87 against the US dollar in early trade on Monday. This increase was supported by the weakening of the American currency in overseas markets and notable foreign fund inflows. Forex traders are currently awaiting key cues from the US Fed policy announcement scheduled for Wednesday, which seems likely to include a rate cut, although the extent remains uncertain.

RBI's Role and Forex Reserves

Market participants pointed out that the RBI's intervention has played a crucial role in sustaining the rupee's strength. The local currency opened at 83.89 but soon reached 83.87, marking a rise of 5 paise from the previous close.

• On Friday, the rupee settled higher by 4 paise at 83.92 against the US dollar.
• Despite a significant drop in the dollar index and controlled Brent crude prices, the rupee maintained its stability.
• RBI's consistent interventions reflect in a record build-up of forex reserves, now nearing USD 690 billion.

Market Trends and FIIs

According to the Reserve Bank of India, India's forex reserves increased by USD 5.248 billion, reaching an unprecedented USD 689.235 billion for the week ending September 6. The overall kitty previously surged by USD 2.299 billion to USD 683.987 billion.

In the domestic equity market, the 30-share BSE Sensex observed an upswing of 128.95 points to 83,019.89 points, while the Nifty rose by 46.00 points. Noteworthy was the activity by Foreign Institutional Investors (FIIs), who were net buyers in the capital markets, purchasing shares worth Rs 2,364.82 crore on Friday.