Rupee stabilises at 83.73 against US dollar in early trade

New Delhi: On Friday, the Indian rupee remained stable at 83.73 compared to the US dollar due to sluggish stock markets and rising global crude oil prices.

Forex traders say the Indian currency received backing as the US dollar weakened against other major currencies after the US Federal Reserve chose to keep interest rates steady and some foreign capital flowed into Indian equities. During the interbank currency exchange, the local currency began trading at 83.74 and slightly increased to reach 83.73 against the US dollar, the same as the closing rate from the day before. The rupee dropped by 5 paise on Thursday to end at 83.73 against the US dollar.

According to Anand James, Chief Market Strategist at Geojit Financial Services, the rupee's decline was limited by the possibility of intervention from the Reserve Bank of India, which carried out dollar sales through government banks. He mentioned that the upcoming important US economic update will be the July jobs report, scheduled for release on Friday.

At the same time, the dollar index, measuring the dollar's performance against six currencies, dropped 0.07 pc to 104.13. In futures trading, Brent crude, which is the global oil benchmark, increased by 0.79 percent to reach USD 80.15 per barrel. During morning trade, the 30-share BSE Sensex dropped by 614.96 points (0.75 pc) to reach 81,252.59 in the domestic equity market, while the broader Nifty fell by 194.80 points (0.78 pc) to 24,816.10.

According to data from the exchange, foreign institutional investors were net purchasers in the capital markets on Thursday, acquiring shares valued at Rs 2,089.28 crore. A recent survey revealed that India's manufacturing sector experienced a slight decline in growth, dropping from 58.3 in June to 58.1 in July. This was attributed to softer increases in new orders and output, while cost pressures and strong demand resulted in the highest increase in selling prices since October 2013.