Rupee Appreciates to 84.78 Against the US Dollar in Early Trade

On Tuesday morning, the Indian rupee showed signs of recovery from its recent lows, gaining 8 paise to reach 84.78 against the US dollar. This improvement was primarily driven by fresh inflows from foreign investors and a positive performance in domestic stock markets.

Monday's trading had seen the rupee suffer its largest decline in over a month, dropping 20 paise to settle at an all-time low of 84.86 against the greenback.

The change in the Reserve Bank of India's leadership added a layer of uncertainty to the currency market. Sanjay Malhotra has been appointed as the new Governor of the Reserve Bank of India, succeeding Shaktikanta Das. Traders are keenly observing how Malhotra's policies may differ, especially in terms of managing the rupee's stability and economic priorities.

At the interbank foreign exchange market, the rupee opened trading at 84.80 and experienced fluctuations, reaching 84.78 against the dollar. It later traded at 84.82.

Amit Pabari, managing director of CR Forex Advisors, indicated that the market is reacting to the uncertainty surrounding the new governor's approach. "It's essential to see whether Malhotra continues with the existing prudent policies or implements new strategies to combat the rupee's weakness, which seems to persist for now," he stated.

Shaktikanta Das has been a crucial figure in India's economic policy, overseeing significant initiatives like the demonetization and the implementation of the goods and services tax (GST). His departure is seen as a pivotal moment for the central bank's future direction.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of currencies, remained stable at 106.15. Brent crude oil prices, another essential economic indicator, experienced a slight decline of 0.36%, trading at USD 71.88 per barrel.

In the domestic markets, the stock index Sensex rose by 83.08 points, or 0.10%, reaching 81,591.54 points. The Nifty index also gained, increasing by 23.35 points, or 0.09%, finishing at 24,642.35 points. Notably, Foreign Institutional Investors (FIIs) were active buyers in the capital markets on Monday, acquiring shares worth Rs 724.27 crore, according to exchange data.

Rupee, Dollar, Inflation