Rupee Continues To Gain As Global Funds Mop Up Domestic Stocks

The Indian rupee continued to strengthen after logging in the best week so far this year, as foreign inflows supported the local currency.

The rupee strengthened by 9 paise to open at 83.48 against the US dollar, according to Bloomberg data. The local currency had closed at 83.57 against the greenback on Friday.

Global funds mopped up Rs 14,000 crore in the cash market, while pocketing Rs 58,500 crore in the derivative market on Friday, to help log in the best week.

The Fed's move triggered expectations of increased foreign inflows, further strengthened by an appreciation in the Chinese Yuan, propelling the rupee higher, said Amit Pabari, managing director, CR Forex Advisors.

The USDINR pair has been hovering around the critical 83.50 level in the onshore market, but has yet to close below it, he said. "A break of this support could pave the way for a swift move towards 83.30, the next key support level, with further potential to reach 83."

The dollar index was down 0.04% at 100.76, while oil prices edged higher after second weekly gain, as tensions escalated between Israel and Hezbollah. 

Indian rupee was on a roll as RBI intervened in the second half of Friday, by buying dollar at 83.47, but not before allowing rupee to gain to that extent, according to Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors. "Today, also, the opening seems to be around 83.47, as RBI steps in to control volatility but not the direction," Bhansali said earlier.