The Indian rupee surged 0.9% to 87.9987 per dollar, its sharpest single-day rise in nearly four months, on RBI intervention and positive India-US trade news.
Mumbai: The Indian rupee posted its strongest single-day gain in nearly four months on Wednesday, recovering from near-record lows amid likely intervention by the Reserve Bank of India (RBI) and optimism over India-US trade negotiations.
The domestic currency rose as much as 0.9 per cent to 87.9987 against the US dollar, marking its biggest intraday jump since June 24, before easing slightly. On Tuesday, the rupee had slipped to 88.8025 per dollar, close to its all-time low.
Traders attributed the rebound to heavy dollar sales by the RBI in both onshore and offshore markets. The central bank has been actively working to stabilise the currency, which has largely traded in a narrow range in recent weeks as the RBI defended the 89-per-dollar level.
Investor sentiment was further boosted by reports that India is fast-tracking trade talks with the United States, aiming to conclude a deal by next month. The prospect of an agreement, combined with a weaker dollar amid expectations of US Federal Reserve rate cuts, supported the rupee and other Asian currencies.
Dilip Parmar, senior research analyst at HDFC Securities, said the rupee had shown resilience, consolidating within a narrow range over the past two weeks due to central bank intervention and foreign fund inflows. “Near-term, spot USD/INR finds support at 88.50 and faces resistance at 89.10,” he added.
Meanwhile, domestic equity markets rallied nearly 1 per cent on Wednesday following a decline on Tuesday. By 1:32 pm, the Sensex was trading at 82,672, up 642 points or 0.8 per cent, while the Nifty was at 25,352.40, up 205 points or 0.82 per cent.
Markets opened on a positive note in line with global cues, with early buying observed across most sectors. Heavyweights such as Bajaj Finserv, Bajaj Finance, NTPC, L&T, Power Grid, BEL, Bharti Airtel, Trent, and Asian Paints led the gains in early trade.
IANS
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