NEW DELHI: Rupee began the week on a cheerful note, inching towards the 94 mark against US dollar on Monday. The currency strengthened by 9 paise to 94.80 against the greenback in early trade, extending its recovery for a third consecutive session. This followed Friday’s close of 94.89, when the currency had gained 10 paise.The Reserve Bank of India‘s structural forex interventions continued to support rupee, although elevated crude oil prices remain a key risk to sustaining the gains.Forex traders said that the currency has staged its sharpest rally in seven months, but sustained pressure from expensive crude, rising US treasury yields and continued foreign capital outflows has kept the currency under strain. The RBI has stepped up its market interventions amid these pressures.CR forex advisors MD Amit Pabari said the currency’s movement below 95 over the past three sessions has brought the 94.80–94.70 range into focus.“With USDINR holding below 95.00 for the 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.“However, elevated crude prices remain a key risk, and the rupee’s next move will depend on whether oil eases or sustains its surge,” he added.Brent crude, which had surged to $110 per barrel, was trading at $107.79 per barrel in futures trade, down 1.88%. Attacks on commercial vessels near the Strait of Hormuz, interruptions to oil flows and threats to Saudi energy infrastructure have fuelled concerns about a prolonged supply shock.The dollar index, which tracks the US currency against a basket of six currencies, stood at 101.83, marginally lower by 0.01%.Meanwhile, domestic equities came under pressure in early trade. The BSE Sensex shed 470.50 points to reach 74,318, while NSE Nifty50 declined 147.10 points to 22,999.05.Foreign investors, however, returned as net buyers of Indian equities on Friday. Foreign Institutional Investors (FIIs) purchased shares worth Rs 1,165.92 crore on a net basis, according to exchange data.The country’s forex reserves also registered another weekly decline. Reserve Bank of India data released on Friday showed that reserves fell by USD 8.578 billion to USD 726.027 billion in the week ended October 9.The fall followed a $12.952 billion decline in the preceding reporting week, which had brought India’s foreign exchange reserves down to $734.606 billion.
