Indian rupee opened marginally lower but gained ground against the US dollar on Friday on robust foreign fund inflows amid stable crude oil prices.
At 09:10 AM, the rupee was trading at 71.94 a dollar, up 4 paise from its Thursday’s close of 71.98. The home currency opened at 72.01 and touched a high and a low of 71.94 and 72.01 a dollar, respectively.
Oil prices were stable on Friday, supported by expected supply cuts from OPEC but held back by record US production. Brent crude oil futures were up 7 cents at $66.69 a barrel.
India imports nearly 80 percent of its total oil needs and a fall in price would drive down the value of its imports. A fall in oil prices by $10 per barrel helps reduce the current account deficit by $9.2 billion, according to market experts.
Besides, fund inflows by foreign investors and a pullback in dollar from 16-month highs also supported the domestic unit.
Foreign institutional investors (FIIs) bought shares worth a net Rs 2,043.06 crore Thursday, as per provisional data.
The dollar index, a gauge of its value versus six major peers, traded at 96.96, up 0.04 percent on Friday. The dollar index hit a 16-month high of 97.69 at the start of the week.
The rupee is the worst performing emerging market currency having lost almost 15 percent since January this year. Between April and September the rupee has plummeted more than 7 percent to the dollar.
In debt markets, the yields on the 10-year government bonds rose 0.3 percent to 7.76 percent after closing at 7.73 percent on Thursday. Bond yields and prices move in opposite directions.
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