The Indian rupee has risen by 18 paise to 81.93 against the U.S. dollar in early trade, according to the country's forex market. The strengthening of the rupee is attributed to the weakness of the U.S. dollar against other global currencies, as well as positive developments in India's equity market. Additionally, the easing of oil prices has also supported the local unit.
Rupee Rises 18 Paise to 81.93 Against US Dollar in Early Trade
The Indian rupee rose 18 paise to 81.93 against the US dollar in early trade on Wednesday, amid positive domestic equities and a weaker US dollar in the international market.
At the interbank forex market, the domestic currency opened at 82.07 against the US dollar, then gained further ground and touched a high of 81.93, registering a rise of 18 paise over its previous close of 82.11.
The gains in the rupee were attributed to the sustained inflows from foreign institutional investors (FIIs) into the Indian equity markets, which have been on an upward trend in recent weeks. The positive sentiment in the domestic equities, along with a weaker US dollar, supported the rupee's rise.
Furthermore, the US dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.13% to 92.07 in early trade, making the US currency weaker against its global peers.
In addition, the continued efforts of the Reserve Bank of India (RBI) to maintain adequate liquidity in the banking system have also supported the rupee's gains. The central bank has been taking measures to ensure sufficient liquidity in the market, which has helped to keep the rupee stable against the US dollar.
However, analysts have warned that the rupee's gains may be short-lived, as the ongoing surge in COVID-19 cases in India and other countries could weigh on the economy and the currency in the coming weeks. The rising cases have raised concerns about the economic recovery, and any negative developments on this front could impact the rupee's performance in the near term.
Overall, the rupee's rise against the US dollar in early trade on Wednesday was supported by positive domestic equities and a weaker US dollar in the international market. However, the ongoing COVID-19 pandemic and other global factors could impact the currency's performance in the coming weeks, and investors will need to closely monitor these developments to stay ahead of any potential risks.
In conclusion, the Indian rupee rose 18 paise to 81.93 against the US dollar in early trade on Wednesday, driven by positive domestic equities and a weaker US dollar. However, analysts have warned that the currency's gains may be short-lived, as the ongoing COVID-19 pandemic and other global factors could impact its performance in the near term.
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