The markets are looking ahead at the RBI’s monetary policy due Friday.
The rupee appreciated by 6 paise to 72.90 against the US dollar in opening trade on Thursday amid muted domestic equities.
At the interbank forex market, the local unit opened at 72.92 against the US dollar and inched higher to 72.90 in early deals, registering a rise of 6 paise over its previous close.
On Wednesday, the rupee had settled at 72.96 against the American currency. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.07 per cent to 91.23.
“The pullback in Asian equities and possibility of the Reserve Bank of India’s intervention, however, would likely cap the rupee’s upside,” Reliance Secuities said in a research note. Markets will now look ahead to Reserve Bank of India’s monetary policy decision Friday, the note added. On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 188.75 points lower at 50,067.00, and the broader NSE Nifty declined 44.25 points to 14,745.70. Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,520.92 crore on Wednesday, according to exchange data. Brent crude futures, the global oil benchmark, rose 0.56 per cent to $58.79 per barrel.
The domestic currency is likely to strengthen 1.3 per cent and average 73.5 against the US dollar in the financial year 2022-23 compared with an average level of 74.4 in the financial year 2021-22.