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Rupee Gains 8 Paise To Recover From All Time Low Against US Dollar

At the interbank foreign exchange, the rupee opened at 86.57 and reached an intra-day high of 86.45 before closing at 86.62 (provisional), gaining eight paise from its previous close.

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Rupee Gains 8 Paise To Recover From All Time Low Against US Dollar

REPRESENTATIVE

The Indian rupee showed some recovery on Tuesday, January 14, after hitting a record low of 86.70 against the US dollar in the previous session. The currency saw some support from a rebound in domestic equity markets following the release of macroeconomic data, despite continued pressure from elevated crude oil prices and ongoing foreign fund outflows.

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At the interbank foreign exchange, the rupee opened at 86.57 and reached an intra-day high of 86.45 before closing at 86.62 (provisional), gaining eight paise from its previous close. On Monday, the rupee had suffered its steepest single-day fall in nearly two years, dropping 66 paise to a historic low of 86.70.

The rupee faced significant pressure throughout the session, primarily due to broad-based dollar demand triggered by maturing positions in the non-deliverable forwards (NDF) market. The currency briefly touched a record low of 86.6475 before closing at 86.63, down from 86.5750 in the prior session.

State-run banks were observed offering dollars, likely on behalf of the Reserve Bank of India (RBI), which helped to limit the rupee's decline. The RBI is believed to be managing its foreign exchange reserves judiciously to stabilize the currency amid global headwinds. The dollar index, which had reached a two-year high, retreated slightly, providing some relief to most Asian currencies.

Jateen Trivedi, VP of Research at LKP Securities, noted, “The rupee traded at 86.60, witnessing volatility as the US dollar held steady around 109.504, while crude prices fluctuated in the USD 77.50–77 range. Positive buying in the capital markets, particularly in PSU stocks, coupled with DII inflows over the past two days, provided minor support to the rupee.”

He added, “With budget expectations building up, these factors could lend further strength. The trading range for the rupee is projected between 86.25 and 86.85, with participants focusing on domestic developments and global cues for direction.”

Investors are now awaiting the release of US wholesale and consumer price inflation data later this week, which could provide further insights into market trends.

Indian Rupee US Dollar