Indian rupee gains 5 paise to 83.39 against US dollar

In early trade on Monday, the Indian rupee appreciated by 5 paise to 83.39 against the US dollar, buoyed by a positive trend in domestic equities. Forex traders noted that the local unit's ascent was supported by a retreat in the American currency and crude oil prices from their recent highs.

At the interbank foreign exchange market, the rupee commenced trading at 83.40 against the greenback. It later touched 83.39 in initial trade, marking a gain of 5 paise from its previous close. On Friday, the rupee had strengthened by 8 paise to settle at 83.44 against the US dollar.

Forex analysts suggested that the Reserve Bank of India (RBI) might have intervened in the forex market, contributing to the local unit's rebound. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, pointed out that India's forex reserves declined to USD 643.162 billion after seven consecutive weeks of increase, indicating RBI's potential dollar sales to stabilize the rupee.

Meanwhile, the RBI reported that India's forex reserves decreased by USD 5.401 billion to USD 643.162 billion for the week ended April 12, even as the overall reserves surged by USD 2.88 billion to a new high of USD 648.562 billion in the previous reporting week.

Bhansali emphasized the RBI's role in monitoring rupee depreciation while noting that oil companies and Foreign Portfolio Investors (FPIs) are active buyers of dollars.

In global markets, the dollar index, which measures the greenback's strength against a basket of six major currencies, was trading at 106.07, showing a decline of 0.07 per cent. Additionally, Brent crude futures, the international oil benchmark, dropped by 0.76 per cent to USD 86.63 per barrel.

On the domestic front, the 30-share BSE Sensex surged by 295.86 points or 0.40 per cent to 73,384.19 in early trade, while the NSE Nifty advanced by 106.00 points or 0.48 per cent to 22,253.00.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, purchasing shares worth Rs 129.39 crore, as per exchange data.