Rupee Strengthens As Dollar Index And Brent Decline

The Indian rupee opened stronger on Tuesday as the dollar and Brent both dipped, following a rally. Rupee opened 2 paise higher at 83.96 against the US dollar, gaining some strength after closing at 83.98 on Monday. 

The dollar index dipped by 0.15% to 102.3860 and Brent crude prices fell 1.37% to $79.82 per barrel, with traders booking profits after recent gains driven by tensions in the Middle East.

The rupee, despite facing pressure from foreign portfolio investment outflows, was supported by the Reserve Bank of India to stay above the 84 mark, said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.

"It is heard that RBI also warned banks against keeping short rupee positions," he added.

Bhansali also referred to recent comments from the commerce minister, who highlighted that the rupee may see some gains after India's forex reserves rose to $705 billion.

He expects trading range for the rupee at 83.90 to 83.05 for the day, adding that "exporters may sell good upticks as the RBI protects 83.99." Meanwhile, importers are advised to buy on dips with a stop loss set at 84.02 for unhedged imports.