The rupee opened at 95.59 per dollar, compared with its previous close of 95.65/$ on Wednesday. This marks a gain of 6 paise for the domestic currency.
The rupee has strengthened for four consecutive sessions, gaining more than 1% during the period, supported by sustained intervention from the Reserve Bank of India (RBI), according to traders.
The central bank stepped in aggressively last Friday (July 24) when the rupee was close to hitting a record low. Since then, the RBI has continued to sell dollars in the market, although the intensity of its intervention has reduced, traders said.
A currency trader at a bank said the RBI’s early presence in the market has helped set the tone for the rupee. The central bank’s actions have reassured traders that it is willing to support the currency near key levels.
Fed decision, dollar movement in focus
Global currency markets are closely watching developments after the US Federal Reserve kept interest rates unchanged, with three policymakers dissenting in favour of a rate hike.
The decision has raised questions among investors about the Fed’s approach towards inflation control. US Treasury yields, especially the 30-year yield, remained elevated as markets sought higher returns amid concerns over inflation risks.
The dollar’s movement following the Fed decision will remain a key factor for emerging market currencies, including the rupee.Crude oil remains a key risk
While RBI support has helped the rupee recover, rising crude oil prices continue to pose a risk for the currency.
Brent crude prices surged nearly 8% on Wednesday (July 29) after the US carried out fresh strikes in Iran, escalating geopolitical tensions and raising concerns over supply disruptions. Prices later eased slightly during Asian trading.
Higher oil prices can weigh on the rupee as India, one of the world’s largest crude importers, sees increased demand for dollars to pay for energy imports.
Markets will continue to track crude oil movements, foreign fund flows and the RBI’s interventions for the rupee’s next direction.
-With Reuters inputs
