Mumbai, Sep 4: The Indian rupee ended marginally stronger against the US dollar on Friday, supported by optimism around foreign capital inflows and improved investor risk appetite.
The rupee gained 2 paise to close at 94.49 (provisional) against the dollar. The modest rise came as expectations of continued foreign currency inflows provided some support to the domestic currency.
Market participants also pointed to the Reserve Bank of India’s presence in the foreign exchange market as an important factor helping limit volatility. The central bank was seen selling dollars during the session to cushion pressure on the rupee from higher global oil prices.
However, gains remained limited as rising crude oil prices and heightened geopolitical tensions involving the US and Iran continued to weigh on the currency. Higher oil prices can increase India’s import bill and put additional pressure on the rupee.
The recent inflows have nevertheless provided a positive backdrop for the currency market. India has attracted substantial foreign-currency resources through recent measures, strengthening the country’s external liquidity position and offering some support to the rupee.
Going ahead, traders are expected to closely monitor global oil prices, foreign fund flows, movements in the US dollar and geopolitical developments for further direction. For now, the rupee’s steady performance reflects a balance between strong domestic inflows and external pressures.