The rupee gained for the seventh consecutive session on Thursday, closing at 70.70 against the US dollar — up 76 paise from its previous close of 71.46 on Tuesday. The rupee recovered sharply in line with the crash in international crude oil prices.
The domestic unit, which had weakened by over 14% from the beginning of the year to a low of Rs 74.4 against the dollar in October, has staged a smart recovery and is now only 10% weaker in the same period. It has appreciated 220 paise in the last seven sessions alone and is the top gainers among Asian currencies in November. The gain in the last few days prompted importers, who were holding back their dollars, to move in to sell their forex holdings, fearing further appreciation in the domestic currency.
According to Care chief economist Madan Sabnavis, the rupee’s weakening trend reversed after the US granted India a six-month waiver on Iran sanctions. “An appreciation of the rupee bodes well for importers and the government to manage their finances,” said Sabnavis.
While the rupee appreciation has come in a bit late for Indian students studying abroad, those planning their travel during the winter holidays will benefit from the rupee’s strength as all foreign travel is dollar-denominated.
Brent crude, the benchmark for international oil, was trading 0.39% lower at $62.85 per barrel on Thursday. The rupee gained even as the equity market lost steam with the BSE sensex ending lower for the third straight session, falling over 219 points to 34,981.