Mumbai: The rupee rose 5 paise to ₹96.48 against the dollar in early trade on Thursday amid possible intervention by the Reserve Bank of India (RBI), even as heightened tensions in West Asia kept global crude oil prices elevated.
Foreign Institutional Investor (FII) outflows and sustained negative sentiment in the domestic equity markets weighed on the local unit, while a weaker greenback provided some respite, forex traders said.
At the interbank foreign exchange market, the rupee opened at ₹96.53 before inching up to ₹96.48, up 5 paise from its previous close.
The rupee depreciated by 28 paise to close at ₹96.53 against the dollar on Wednesday.
"State-owned banks were seen selling dollars, widely viewed as intervention on behalf of the RBI, around the ₹96.50 level, preventing a steeper depreciation, but the rupee still closed lower on Wednesday. The rupee remains near its all-time closing low and if oil prices keep rising, we may see it fall further, too," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
"The rupee is expected to move in the range of ₹96.50-₹96.65 in Thursday's session, with risk tilted to the downside, although support from the RBI is likely to limit the losses. Key support would be at ₹96.10-₹95.80," Aamir Makda, Commodity & Currency Analyst, Technical Research, Choice Broking, said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.14 per cent lower at 100.97.
Brent crude, the global oil benchmark, was trading 2.26 per cent higher at $96.20 per barrel in futures trade.
Forex traders said crude oil prices remain elevated amid concerns over the security of oil shipments through the Red Sea and the Strait of Hormuz.
On the domestic equity market front, the Sensex extended losses on Thursday, declining 230.95 points to 76,521.02 in early trade, while the Nifty was down 57.15 points to 23,937.
Foreign Institutional Investors offloaded equities worth ₹819.20 crore on a net basis on Wednesday, according to exchange data.
