Rupee Strengthens for Second Day, Closes at 87.87 Against the Dollar

The Indian rupee gained 21 paise on Thursday, closing at 87.87 (provisional) against the U.S. dollar, marking its second consecutive session of gains amid a weaker greenback and positive investor sentiment.

The domestic currency opened at 87.76 and touched an intraday high of 87.68, before settling higher. Analysts attribute the rally to softening of the dollar against major currencies, likely intervention by the Reserve Bank of India (RBI), and robust domestic equity performance.

“The rupee has benefited from a softer dollar and a broader risk-on sentiment in global markets. Foreign fund inflows and strategic central bank measures have also supported the currency’s recovery,” said Dilip Parmar, Research Analyst at HDFC Securities. Parmar added that with the upcoming holiday, the rupee is expected to trade within a narrow range, with its next moves hinging on dollar flows and geopolitical developments.

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Market Dynamics and Indicators

The dollar index, which tracks the greenback against a basket of six major currencies, fell 0.21% to 98.58, reflecting weakness in the U.S. currency. Meanwhile, Brent crude futures rose 0.36% to $62.12 per barrel.

Domestic equities mirrored the positive trend. The Sensex surged 862 points to 83,467.66, while the Nifty 50 gained 261.75 points to 25,585.30. Foreign Institutional Investors (FIIs) were net buyers, investing ₹68.64 crore in equities on Wednesday.

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Trade Data Highlights

India’s export growth moderated to $36.38 billion in September, up 6.74% year-on-year, while imports jumped 16.6%, widening the trade deficit to $31.15 billion, the highest in over a year.

Analysts say the rupee’s near-term support lies around 87.60, while resistance is seen at 88.70, indicating potential stability as global and domestic factors interplay.