Mumbai: The rupee reversed its four-day losing streak by recovering 21 paise to close at 71.03 against the US dollar on Thursday on increased selling of the greenback by exporters and lower crude oil prices.
Besides, liquidity infusion by central banks through open market operations and unveiling a new RBI policy for overseas borrowings, allowing all eligible entities to raise foreign funding under the automatic route and removing sectoral curbs, supported the rupee.
At the Interbank Foreign Exchange, the rupee opened stronger at 71.15 a dollar against the previous close of 70.24. The local unit moved in a range of 70.92 to 71.40, before finally ending at 71.03, showing a gain of 21 paise.
The rupee on Wednesday plunged by 19 paise to close at 71.24 against the US dollar.
"Indian rupee has broken the four days losing streak, after liquidity infusion by central banks through open market operation. Central bank eased overseas borrowing rules for companies, which also helped rupee to recover from the lower levels," said V K Sharma, head PCG and capital markets strategy, HDFC Securities.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.01 percent at 96.04.
Furthermore, losses in crude oil and gains in domestic equities also supported the trading sentiment in the forex market.
Brent crude, the global benchmark, was trading at $60.56 per barrel, lower by 1.24 percent.
"The Brent crude rally halted on Thursday on the face of strongly rising crude oil production coming out of the US. The news on Brent reflected in the rupee movement which rose after depreciating for four straight days. The rupee was among the top five best performing EM currencies today," said Sunil Sharma, chief investment officer, Sanctum Wealth Management.
Meanwhile, foreign funds sold shares worth Rs 90.10 crore on a net basis on Wednesday, while domestic institutional investors were net buyers to the tune of Rs 304.27 crore, provisional data showed.
Benchmark indices closed higher for the third straight session Thursday. The BSE Sensex settled 52.79 points, or 0.15 percent, higher at 36,374.08. The broader NSE Nifty inched up 14.90 points, or 0.14 percent, to 10,905.20.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.3418 and for rupee/euro at 81.2583. The reference rate for rupee/British pound was fixed at 91.8616 and for rupee/100 Japanese yen at 65.51.
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Updated Date: Jan 17, 2019 18:28:27 IST