Rupee rises 7 paise to settle at 95.41 against US dollar

MUMBAI: The rupee appreciated by 7 paise to settle at 95.41 (provisional) against the US dollar on Thursday even as crude oil prices firmed up and the greenback strengthened in the global markets.

A recovery in the stock markets and dollar selling by state-run lenders supported the local currency amid rising volatility triggered by the fresh escalation in the West Asia crisis.

At the interbank foreign exchange market, the rupee opened lower by 4 paise at 95.52 against the US dollar and later traded in the range of 95.58 to 95.28 during the day. It settled at 95.41 (provisional), up 7 paise from the previous close. The rupee had declined by 52 paise to settle at 95.48 against the US dollar on Wednesday.

Analysts said suspected RBI intervention provided support to the local unit, while elevated crude oil prices and a stronger dollar weighed on it.

"The rupee appreciated today after coming under pressure yesterday. The Reserve Bank of India's intervention supported the rupee while state-owned banks sold dollars, widely believed to be on behalf of the RBI. However, Middle East tensions remain the biggest negative factor, with fresh military action involving the US and Iran keeping concerns alive over the security of the Strait of Hormuz," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 100.77, up 0.01 per cent.

Brent crude futures were trading at USD 78.40 per barrel, higher by 0.46 per cent.

The US launched new airstrikes against Iran on Thursday, and Tehran responded by targeting Gulf countries in an exchange of fire that threatened an interim deal intended to help end the war in West Asia.

On the domestic equity market front, Sensex rebounded by 238.22 points to settle at 76,741.82 while Nifty was up 80.75 points to 23,962.80.

Foreign institutional investors purchased equities worth Rs 1,962.80 crore on a net basis on Wednesday, according to exchange data.