Rupee vs dollar, Dec 22: Domestic currency appreciated 22 paise to 89.45 against US dollar in early trade

The rupee appreciated 22 paise to 89.45 against the US dollar in early trade on Monday, supported by foreign fund inflows and a positive trend in domestic equities.

Forex traders said corporate dollar inflows and Brent crude prices hovering near $60 per barrel supported investor sentiment further.

At the interbank foreign exchange market, the rupee opened at 89.53 against the US dollar, then gained some ground and touched 89.45 against the US dollar, registering a gain of 22 paise over its previous close.

On Friday, the rupee appreciated 53 paise to 89.67 against the US dollar.

"The broader depreciation trend remains intact despite the near-term consolidation," Bhansali noted.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04% higher at 98.63.

Brent crude, the global oil benchmark, was trading higher by 0.83% at $60.97 per barrel in futures trade.

Reports highlight firm RBI intervention last week with heavy dollar selling via state-run banks lifting the rupee from its recent lows, Bhansali said.

The rupee’s rise could also indicate some tailwinds from the lower trade deficit during the month of November, as well as FPIs who have become buyers of Indian equity, Bhansali added.

Meanwhile, India's forex reserves jumped by $1.689 billion to $688.949 billion during the week ended December 12, the Reserve Bank of India said on Friday. In the previous reporting week, the overall reserves increased by $1.033 billion to $687.26 billion.

Stock market on December 22

The Indian stock market opened on a positive note for the second consecutive session on Monday, December 22, driven by a strong rally in IT and metal stocks. Positive global cues and foreign fund inflows also added to investor optimism.

The broader market was trading higher in early deals, with the Nifty Midcap 100 gaining 0.60% and the Nifty Smallcap 100 advancing 0.59%.

Investors’ sentiment was further supported as the rupee continued to regain its position from record lows. On Monday, the local currency opened 22 paise higher at 89.45 against the US dollar.

According to exchange data, on Friday, the foreign institutional investors (FIIs) purchased shares worth ₹1,830.89 crore, while the domestic institutional investors (DIIs) bought equities worth ₹5,722.89 crore on a net basis.