Currency Market News: Rupee gains 4 paise to close at 85.62 vs dollar amid strong FII inflows

Rupee appreciated 4 paise to settle at 85.62 (provisional) against the US dollar on Tuesday, buoyed by robust foreign capital inflows. However, gains were capped by a mixed performance in domestic equities, a rise in global crude oil prices, and a firm greenback overseas.

According to exchange data, Foreign Institutional Investors (FIIs) were net buyers, picking up equities worth Rs 1,992.87 crore on Monday.

At the interbank foreign exchange, the local unit opened at 85.62, hit an intraday high of 85.51 and a low of 85.68 before closing at 85.62—up from Monday’s close of 85.66.

“The USD-INR pair continues to hover between 85.00 and 86.00, with markets awaiting a decisive trigger. Comfortable liquidity conditions post the CRR cut have softened forward premiums, making hedging less attractive for exporters,” said Anindya Banerjee, Head of Currency & Commodity at Kotak Securities.

He added, “RBI is expected to remain active to prevent sharp rupee fluctuations, supported by India’s stable macro fundamentals.”

Stock market summary

On the equity front, domestic benchmarks ended a volatile session flat. The Sensex dipped 53.5 points to 82,391.7, while the Nifty50 inched up by 1.1 point to close at 25,104.3. Losses in banking majors like HDFC Bank and ICICI Bank were offset by gains in IT and energy stocks.

Global market sentiment remained cautious as US-China trade talks entered a second day in London.

Meanwhile, the dollar index rose 0.15 per cent to 99.09. Brent crude gained 0.18 per cent to $67.16 a barrel in futures trade.

Banerjee noted that the next move for USD-INR would hinge on global risk sentiment and the dollar index trend, adding that a sustained break above 100.00 on the DXY could push USD-INR above the 86.00 mark, with further potential toward 86.50.