The rupee appreciated by 2 paise to trade at 83.72 against the U.S. dollar in the early session on July 29 amid a weak dollar in the overseas markets.
At the interbank foreign exchange market, the rupee opened firm at 83.70 against the U.S. dollar. The local currency moved in a tight range of 83.70 to 83.72 in early trade.
The rupee was trading at 83.72 against the U.S. dollar at 9.30 a.m.
“Foreign fund outflows from Indian equities after the Government’s decision to hike the tax rate on capital gains weighed on the local currency and restricted the up move,” Forex traders said.
The domestic currency had recovered from its all-time low by 5 paise to settle at 83.73 against the U.S. dollar on July 26, on the strength in domestic markets and expectations of fresh foreign inflows.
In the domestic equity market, the 30-share BSE Sensex hit an all-time high, rising 355.7 points or 0.44%, to 81,688.42 in early trade on July 29.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 104.23, marginally down by 0.08%. Brent crude futures — the global oil benchmark — rose 0.24, or 0.3 %, to USD 81.37 per barrel.
“India’s forex reserves had jumped USD 4 billion to reach an all-time high of USD 670.857 billion for the week ended on July 19,” according to the Reserve Bank data released on July 26.
“Foreign institutional investors (FIIs) were net buyers in the capital markets on July 26 as they purchased shares worth ₹2,546.38 crore,” according to exchange data.