The rupee appreciated by 21 paise to close at 82.58 against the US dollar on Tuesday as suspected RBI intervention bolstered the sentiment amid continued FII outflows and firm crude oil prices.
Forex traders said the central bank’s intervention and lower commodity prices supported the local unit.
During the trading session, the rupee touched a high of 82.58 and a low of 82.75 against the dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.03 per cent to 104.70.
Global oil benchmark Brent crude futures advanced 0.75 per cent to USD 83.07 per barrel.
Also read: Markets Wrap – Tue, 28 Feb ‘23: Nifty, Sensex fall, rupee gains; Asia, US markets, Gold, Crude updates
According to Dilip Parmar, Research Analyst, HDFC Securities, the Indian rupee gained along with most regional currencies ahead of the important economic data release.
“The central bank’s intervention, lower commodity prices and expectation of dollar inflows supported the local unit in Tuesday’s trade,” Parmar said.
In the near-term, spot USDINR is expected to trade between 83 to 82.50. The directional move of USDINR will depend on how the greenback performs among G-10 currencies and geopolitical updates.
“The historical seasonality of March month favours rupee bulls as it has gained in 7 out of the last 10 years, the average gains pegged at 0.54 per cent,” Parmar added.
Meanwhile, official data released after the close of forex market showed that India’s economic growth slowed to 4.4 per cent in the December quarter on continued weakness in the manufacturing sector and rising borrowing costs hurting demand.
The government, however, continues to be confident about touching a GDP growth of 7 per cent for FY23 (April 2022 to March 2023) as a whole.
Production of eight infrastructure sectors expanded at a four-month high of 7.8 per cent in January 2023 on better show by coal, fertiliser, steel and electricity segments.
Also read: Why Anil Agrawal’s Vedanta shares fell nearly 9% today; Hindustan Zinc sale still a thorn in its side
On the domestic equity market front, the 30-share BSE Sensex declined 326.23 points or 0.55 per cent to end at 58,962.12, while the broader NSE Nifty fell 88.75 points or 0.51 per cent to 17,303.95.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 4,559.21 crore, according to exchange data.