The rupee on Thursday gained 15 paise to 78.07 against the US dollar in early trade after the US Federal Reserve hiked interest rates by 75 basis points and signaled more rate action to fight inflation. Besides, a firm trend in the domestic equities and a weak US dollar in the overseas market supported the domestic unit, Forex dealers said.
However, continued outflow of foreign funds and rise in crude oil prices limited the appreciation bias of the rupee. In the interbank foreign exchange, the rupee opened stronger at 78.06 against the US dollar, then closed at 78.07, registering an increase of 15 paise over the previous close. It was trading in a tight range in the initial deals. The rupee had closed at a record low of 78.22 against the US dollar in the previous session.
The US Federal Reserve on Wednesday raised its key interest rate by 75 basis points, the biggest increase since 1994, in the range of 1.5-1.75 per cent. It also indicated more rate hikes to pacify high inflation. On the domestic equity market front, the 30-share Sensex was trading 575.21 points or 1.09 per cent higher at 53,116.60, while the broader NSE nifty It rose 158.20 points, or 1.01 percent, to 15,850.35. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.21 per cent to 104.94.
Global oil benchmark Brent crude futures rose 0.55 per cent to $119.16 a barrel. Foreign institutional investors were net sellers in the capital markets on Wednesday as they sold shares worth Rs 3,531.15 crore, according to exchange data. According to government data released on Wednesday, India’s merchandise exports rose 20.55 percent to $38.94 billion in May, while the trade deficit widened to a record $24.29 billion.
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