Rupee firms up by 10 paise to 69.34 against US dollar driven by easing crude prices

Mumbai: The Indian rupee on Wednesday appreciated by 10 paise to close at 69.34 to the US dollar, marking the second straight session of gains driven by easing crude prices.

At the interbank foreign exchange market, the rupee opened at 69.38 a dollar and advanced to a high of 69.28 during the day. It finally settled at 69.34, up 10 paise against its previous close.

The Indian currency has strengthened by 31 paise in the last two sessions.

"Indian rupee trading higher amid fall in crude oil price. Market participants awaiting May retail inflation data to gauge the possibility of further interest rate cuts," said V K Sharma, Head-PCG & Capital Market Strategy, HDFC securities.

 Rupee firms up by 10 paise to 69.34 against US dollar driven by easing crude prices

Representational image. Reuters.

Retail inflation spiked to 3.05 percent in May from 2.99 percent in April, government data showed.

Brent crude futures, the global oil benchmark, fell 2.49 percent to $60.74 per barrel.

Besides easing crude prices, forex traders said the local currency gained strength following the Reserve Bank of India's decision to pump in liquidity into the system.

The RBI said Tuesday it will infuse Rs 15,000 crore into the financial system through bond purchases on Thursday.

"Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of (six) government securities under OMOs for an aggregate amount of Rs 150 billion on June 13, 2019 (Thursday) through multi-security auction using the multiple price method," the central bank said in a statement.

Meanwhile, the dollar Index which gauges the greenback's strength against a basket of six currencies, rose 0.07 percent to 96.75.

Foreign institutional investors net sold equities worth Rs 1,050.43 crore on Wednesday, provisional data available with stock exchanges showed.

The 10-year government bond yield was at 7.01 percent on Wednesday.

The BSE gauge pared some losses to settle 193.65 points, or 0.48 percent, lower at 39,756.81. Similarly, the broader NSE Nifty fell 59.40 points, or 0.50 percent, to close at 11,906.20.

Meanwhile, Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.4222 and for rupee/euro at 78.5799. The reference rate for rupee/British pound was fixed at 88.0398 and for rupee/100 Japanese yen at 63.90.

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Updated Date: Jun 12, 2019 19:05:07 IST