The domestic currency closed at 95.68 per US dollar, compared with 95.65 in the previous session, down 0.03% or 0.0325 paise, according to market data.
The rupee had opened at 95.59 per dollar, extending its recent recovery after gaining for four consecutive sessions. Traders attributed the recent strength in the domestic currency to sustained intervention by the Reserve Bank of India (RBI), which stepped in aggressively last Friday when the rupee approached a record low and has since continued selling dollars in the market, albeit at a reduced pace.
Market participants remained focused on the US Federal Reserve after it kept interest rates unchanged, while the movement in the US dollar continued to influence emerging market currencies, including the rupee.
Crude oil prices also remained in focus after surging sharply following renewed geopolitical tensions in West Asia. Higher crude prices are seen as a key risk for the rupee as India relies heavily on imports to meet its energy needs, increasing demand for dollars.
Domestic equities, however, ended higher on Thursday, with the Sensex gaining 274 points and the Nifty closing above the 24,300 mark.
Traders said the rupee’s near-term direction will continue to depend on RBI intervention, foreign fund flows, crude oil prices and the trajectory of the US dollar.
