The rupee on Friday strengthened 53 paise against the US dollar to close at 73.69
Mumbai: The rupee on Friday strengthened 53 paise against the US dollar to close at 73.69 as the Reserve Bank of India stayed away from intervening while traders squared off their long dollar positions ahead of the US Federal Reserve chairman Jerome Powell’s Jackson Hole speech later in the evening. Powell in his speech hinted at slowing bond purchases by the year-end, post which the rupee strengthened to 73.5 in the non-deliverable forward (NDF) market. Anaylsts expect the rupee to continue to strengthen.
Balancing the threat of Covid with the ongoing economic recovery, Powell in his highly anticipated speech at the virtual Jackson Hole Symposium, suggested that the Fed, which has been buying $120 billion worth of treasury and mortgage-backed securities every month since the height of the pandemic to support the economy, will start pumping the brakes on those asset purchases before the end of the year.
“The rupee appreciated on rumours of Adani Green related inflows and Bank of India related QIP flows but these could not be substantiated. Also, the RBI stayed away from buying dollars to prevent the rupee from strengthening,” said a trader.
Ritesh Bhansali, vice-president, Mecklai Finan-cial Services said, “The moment the rupee touched 74, traders squared off their existing buy dollar positions which accentuated the move towards 73. Also, the central bank was conspicuous by its absence, which fuelled the dollar selling move. Post Powell’s speech, we expect the rupee to strengthen and it has already appreciated to 73.5 levels in the NDF market.”
At the interbank forex market, the local unit opened strong at 74.17 against the greenback, then gained strength and settled for the day at 73.69, a level last seen on June 16, up 0.73 per cent.