MUMBAI: The rupee rallied by 50 paise to close at 73.45 against the US dollar on Thursday, posting its biggest single-session spurt in three weeks on increased selling of the greenback by exporters, softening crude oil prices and upbeat economic numbers. Easing of concerns over the rift between the government of India and the Reserve Bank of India (RBI) also supported the rupee’s recovery, forex dealers said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit opened higher at 73.88, then gained further ground and settled for the day at 73.45, registering a jump of 50 paise.
On Wednesday, the rupee had plunged 27 paise to close at a nearly three-week low of 73.95 as the dollar strengthened against major global currencies amid steady capital outflows.
Indian finance ministry on Wednesday said the government has “nurtured and respected” autonomy of the central bank and has been holding extensive consultations with it on many issues.
On the economy front, the Goods and Services Tax (GST) collections for October crossed Rs 1-lakh crore mark, while India leapfrogged 23 places to the 77th rank in World Bank’s latest Ease of Doing Business rankings.
Manufacturing PMI also strengthened in October as firms scaled up production and employment amid strong rise in new business order flows.
“Rupee reacted positively with a sharp appreciation of 50 paise against the dollar. Today’s gain is the highest one day gain for rupee against dollar since October 12, 2018,” said V K Sharma, Head PCG & Capital Markets Group, HDFC Securities.
Crude oil prices moderated amid increase in supply and growing concerns that demand might weaken on the prospect of a global economic slowdown.
Brent crude, the international benchmark, was trading 0.95 per cent lower at USD 74.33 per barrel.
Meanwhile, foreign funds pulled out Rs 193.65 crore from the capital markets on a net basis Wednesday, while domestic institutional investors bought shares worth Rs 1,124.92 crore, provisional data showed.
The BSE Sensex erased all gains in a highly volatile session Thursday and finally settled 10.08 points, or 0.03 per cent, lower at 34,431.97. The NSE Nifty, after shuttling between 10,441.90 and 10,341.90, ended 6.15 points, or 0.06 per cent down at 10,380.45.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 73.8295 and for rupee/euro at 83.7261. The reference rate for rupee/British pound was fixed at 94.8182 and for rupee/100 Japanese yen at 65.40.