Forex dealers reported that despite continued foreign capital outflows and increasing crude prices on international markets, investors remained cautious.
In early trade on Wednesday, the rupee strengthened 4 paise to 82.66 versus the US dollar, helped by a strong trend in domestic stocks ahead of the Reserve Bank of India’s monetary policy announcement.
The rise in petroleum prices on international markets and the ongoing flight of foreign cash, according to currency dealers, continue to worry investors.
At the interbank foreign exchange, the local unit started off well against the dollar at 82.67 before edging up to 82.66, up 4 paise from its previous close.
Early transactions saw it fluctuating within a narrow 82.66–82.67 range.
The rupee increased 6 paise on Tuesday to end the day at 82.70 versus the US dollar.
The dollar index, which measures the strength of the dollar against a basket of six different currencies, decreased 0.10 percent to 103.33.
The benchmark for world oil, Brent crude futures, up 0.18 percent to USD 83.84 a barrel.
Investors will closely monitor the Reserve Bank of India’s monetary policy announcement on Wednesday for more clues, and there are predictions that the repo rate would be increased by 25 basis points.
However, according to SBI experts, the RBI would hold off on raising interest rates.
The 30-share BSE Sensex, meanwhile, was up 220.75 points, or 0.37 percent, to 60,506.79 points. To 17,792.85 points, the NSE Nifty index as a whole increased by 71.35 points, or 0.40 percent.
According to exchange statistics, Foreign Institutional Investors (FIIs) sold shares worth Rs 2,559.96 crore on Tuesday, making them net sellers in the capital market.
