The Indian rupee nudged up on
Monday, aided by dollar sales by foreign lenders and a modest
retreat in oil prices, while traders looked for cues to gauge
whether a bounceback from near record low levels versus the
dollar has room to extend.
The South Asian currency had climbed 2 per cent last week
on the back of a fresh spate of policy measures to shore it up
after it threatened to breach record lows of near 97 per dollar.
It was last at 94.8225, up 0.1 per cent from its closing level on
Friday, hovering around its strongest in over a month.
Traders pointed to foreign banks’ dollar sales and lower oil
prices as tailwinds for the rupee while retaining a cautious
stance on the currency’s trajectory.
The bevy of policy measures — including a dedicated window
to supply dollars to oil refiners and cash margin requirements
on derivatives to hedge certain current account payments — may
have steadied the rupee, but analysts and traders reckon that
underlying fundamentals need to improve for sustained gains.
“The pair (USD/INR) is firmly capped around 97 but the key
thing to watch is whether it will move to retest those levels in
the near term and what sort of pushback it may draw from the
RBI,” a trader at a state-run lender said.
Meanwhile, Brent crude oil prices were down nearly 2 per cent at
$107.7 per barrel after US President Donald Trump waived
sanctions and tariffs on Russia that may lead to more Russian
fuel exports.
The dollar index was steady at 101.8 while Asian
currencies were little changed. The rupee is the region’s
second-best performer so far in October, gaining more than 1.5 per cent.
“With USD/INR holding below 95.00 for last 3 sessions, the
focus shifts to 94.80–94.70. A sustained break below 94.80 could
open the way towards 94.00 over the coming weeks,” said Amit
Pabari, managing director at FX advisory firm CR Forex.
“However, elevated crude prices remain a key risk.”