Rupee recovers from all-time low level, opens 25 paise higher at 83.84 against US dollar

The Indian rupee bounced back from its all-time low and opened 25 paise higher at 83.84 against the US dollar on Tuesday morning. This recovery was attributed to the rebound in the domestic stock market. However, aggressive dollar bids from foreign banks continued to exert pressure on the local currency. Forex traders noted that global market uncertainty, heightened geopolitical tensions in the Middle East, and foreign investors’ capital outflows further dampened investor confidence.

At the interbank foreign exchange market, the rupee started trading at 83.92 and reached an early high of 83.84, marking a gain of 25 paise from its previous all-time low closing of 84.09 against the US dollar. On the previous day, the rupee had dropped 37 paise to settle at an all-time low of 84.09 against the US dollar. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, commented that the rupee was being sold off irrespective of market conditions, indicating a continuous demand for the US dollar as foreign portfolio investors exited the Indian equity market due to high valuation concerns.

In other financial news, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.16 percent to 102.85 points. Additionally, Brent crude, the global oil benchmark, was trading at USD 77.15 per barrel in futures trade. This was driven by concerns about escalating conflicts in the Middle East that could disrupt supplies, outweighing fears of a potential US recession that could impact demand in the largest oil-consuming country in the world.

Traders also pointed out that Israel and the US were bracing for a significant escalation following pledges from Iran and Hamas to retaliate against Israel for the recent killing of a Hamas leader. In the domestic equity market, the 30-share BSE Sensex gained 903.63 points, or 1.15 percent, reaching 79,663.03 points, while the Nifty rose by 270.50 points, or 1.12 percent, reaching 24,326.10 points. Furthermore, on Monday, Foreign Institutional Investors (FIIs) were net sellers in the capital markets, offloading shares worth Rs 10,073.75 crore, according to exchange data.