Rupee Closes Stronger On RBI Intervention Amid FII Outflows From Stocks, Bonds

The Indian rupee closed 4 paise stronger on Wednesday as relentless intervention by the Reserve Bank of India offset the impact from consistent selling of stocks by foreign investors. The domestic currency weakened to 84.07 intraday.

Inflows into the slew of IPOs, including Hyundai Motor India Ltd., also supported the rupee.

The rupee closed at Rs 84.05 against the US dollar, according to Bloomberg data. The currency had closed at Rs 84.04 against the greenback on Tuesday.

Foreign investors sold Indian stocks for the 12th consecutive day due to the revival of Chinese stocks and concerns about valuation. In the last 11 sessions, the foreign institutional investors have offloaded domestic stocks worth over Rs 74,800 crore, according to provisional data from the National Stock Exchange.

Additionally, following their addition to JPMorgan Chase & Co.'s emerging-market bond index, Indian sovereign bonds eligible for global debt inclusion experienced their first weekly outflow.

This significant outflow has pushed the RBI to allow the rupee to reach record levels, according to Amit Pabari, managing director of CR Forex Advisors. "Adding to the pressure is the strengthening dollar index, which has surged to a two-month high of 103.25."

Crude oil prices advanced on Wednesday after the possibility of targeting nuclear facilities was back as Israel said it would decide on its own on how to attack Iran.

Brent crude was trading 0.44% lower at $73.92 a barrel as of 5:41 p.m. The US Dollar Index was 0.05% lower at $103.21 at 5:56 p.m.