Rupee gains for 6th straight session, rises 21 paise to close at 71.46 against dollar as crude oil prices soften

Mumbai: The rupee rose by 21 paise to end at 71.46 against the US dollar Tuesday on increased selling of the greenback by exporters amid softening crude oil prices, and persistent foreign fund inflows. This is the sixth straight session of gains for the domestic unit as the US dollar weakened against some currencies overseas. In the last six trading sessions, the rupee has gained 143 paise. “Domestic currency strengthened for a sixth day after RBI’s OMOs supported rupee’s rise that has been set off by declining oil prices and continued capital inflows. The appreciation has happened even as Dollar fell to a two week low following Fed’s cautious comments over a potential global slow down,” Anand James, Chief Market Strategist at Geojit Financial Services, said. The Reserve Bank on Monday said it will inject Rs 8,000 crore into the system through the purchase of government securities on 22 November. [caption id=“attachment_5131081” align=“alignleft” width=“380”] Representational image.[/caption] At the Interbank Foreign Exchange (forex), the rupee opened on a firm note at 71.39. It gained further ground to hit a high of 71.27, following dollar selling by exporters. The local unit, however, pared the initial gains and finally settled the day at 71.46 to the US dollar, up 21 paise. On Monday, the rupee had increased by 26 paise to close at a 10-week high of 71.67 against the US currency. Forex traders said the uptrend in the local unit was largely driven by foreign funds inflows to capital markets. Foreign institutional investors (FIIs), made fresh purchases worth Rs 1,103.36 crore Monday, as per provisional data. Meanwhile, the Reserve Bank and the government Monday agreed to refer to an expert committee the contentious issue of the appropriate size of reserves that the RBI must hold, while restructuring of stressed loans of small businesses would be considered by the central bank. Globally, Brent crude, the international benchmark, was trading at $66.56 per barrel on Tuesday. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.3276 and for rupee/euro at 81.6867. The reference rate for rupee/British pound was fixed at 91.7197 and for rupee/100 Japanese yen at 63.40. Meanwhile, the Sensex fell over 300 points or 0.84 percent, to 35,474.51 on heavy selling by market participants, in step with a global selloff. The 50-share NSE Nifty too dropped by 107.20 points, or 1 perent, to 10,656.20.