Rupee ends 63 paise higher at 86.82 against US dollar; logs highest one-day gain in 2 years

Mumbai, Feb 11 (PTI) The rupee on Tuesday rallied 63 paise, recording its steepest single-day recovery in nearly two years, to settle at 86.82 (provisional) against the US dollar, backed by dollar selling by banks.

According to forex traders, Tuesday's sharp gain a day after sliding closer to the 88 level shows a highly volatile currency market amid concerns over the worldwide tariff war.

At the interbank foreign exchange, the rupee opened at 87.45 against the greenback and touched the intraday high of 86.61 during the session. The unit settled at 86.82 (provisional) against the dollar, registering a gain of 63 paise from its previous close.

The domestic unit had earlier recorded its steepest single-day gain on March 3, 2023, when it surged 63 paise from the preceding session.

On Monday, the rupee plunged 45 paise to near 88 per US dollar levels in the first half but staged a dramatic rebound in the second half to end with gains at 87.45. Dollar selling by banks possibly on behalf of the RBI helped the rupee recover from all-time lows.

Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan, said the rupee rallied by nearly 1 per cent, marking its biggest intraday gains in about two years on intervention by the Reserve Bank of India.

Choudhary said going further the rupee is expected to trade with negative bias amid weak tone in the domestic markets and sustained FII outflows.

"A strong US dollar and uncertainty over US trade tariffs may also pressurise the rupee. However, any further intervention by the RBI may support the rupee at lower levels. Traders may take cues from inflation data from US and India this week. USD-INR spot price is expected to trade in a range of Rs 86.50 to Rs 87.20," he added.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.01 per cent lower at 108.18.

The elevated level of dollar index was attributed to escalating trade tensions after the US imposed a 25 per cent tariffs on aluminium and steel imports into the country.

Brent crude, the global oil benchmark, surged 1.23 per cent to USD 76.80 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex crashed 1,018.20 points, or 1.32 per cent, to settle at 76,293.60, while the Nifty tanked 309.80 points, or 1.32 per cent, to 23,071.80 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 2,463.72 crore in the capital markets on a net basis on Monday, according to exchange data. PTI HVA MR MR MR

Source: PTI