Rupee rises 7 paise to 93.70 against US dollar as foreign inflows support sentiment

Rupee strengthens below 94/$

NEW DELHI: Rupee began Wednesday on a strong note, gaining 7 paise to 93.70 against the US dollar in early trade. The momentum is supported by renewed foreign fund inflows, softer crude oil prices and improving geopolitical sentiment.Rupee has emerged as one of Asia's best-performing currencies in FY27. Forex traders said the gradual return of foreign investors to Indian markets, following months of cautious participation and significant outflows, has helped support the rupee.In the interbank foreign exchange market, the rupee opened at around 93.71 before gaining further to touch 93.70, up 7 paise from its previous closing level on Monday.Domestic equity, currency and debt markets remained closed on Tuesday on account of 'Diwali Balipratipada'. In the previous trading session on Monday, the rupee had gained 21 paise to close at 93.77 against the US dollar.CR Forex Advisors MD Amit Pabari said rupee's positive momentum was being supported by the steady return of foreign capital, softer crude prices and improving geopolitical sentiment."The rupee's underlying momentum remains positive, backed by a steady return of foreign capital, softer crude prices and improving geopolitical sentiment.

If these supportive factors continue, USD/INR could extend its decline towards 93.50, with 93.00 emerging as the next important level to watch," Pabari said.Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 102.26, up 0.03 per cent.Brent crude, the global oil benchmark, was trading 1.01 per cent higher at USD 92.41 per barrel in futures trade.Commenting on the factors influencing the domestic currency, Anindya Banerjee, Head of Commodity and Currency Research at Kotak NEO, said cheaper oil prices offered support to the rupee by reducing the import bill. However, higher US yields and a stronger dollar continued to exert pressure."For the rupee, cheaper oil offers support through a lower import bill, while higher US yields and the stronger dollar create an opposing pressure," Banerjee said.He added that India's inflation data, scheduled to be released on Thursday, would be the next domestic policy signal.Foreign investment flows have also provided support to domestic markets. According to exchange data, foreign institutional investors (FIIs) purchased equities worth Rs 7,212.22 crore on Monday.Foreign investors have turned net buyers of Indian equities in November, investing Rs 53,739 crore in the first nine days of the month, following two consecutive months of outflows.The buying has been driven by the AI-led sell-off in global markets, strong domestic earnings growth and attractive valuations of large-cap stocks.The latest inflows come after foreign investors withdrew Rs 34,843 crore in October and Rs 35,861 crore in September, according to data available with the depositories.