Rupee rises 8 paise to 70.79 on easing trade worries

INSUBCONTINENT EXCLUSIVE:
Mumbai: The rupee recovered by 8 paise to close at 70.79 against the dollar on Tuesday on increased selling of the greenback by exporters
and softening crude oil prices. Forex traders said the rupee's rise was supported by dollar selling by exporters and banks after the
Chinese foreign ministry announced a mutually beneficial agreement with the US. At the Interbank Foreign Exchange (forex) market, the rupee
opened lower at 70.91 and lost further ground to hit a low of 71.02 on a stronger dollar, strengthening US yields and worries about
escalation in US-China trade war. The local unit, however, pared the initial losses and settled the day on a higher note at 70.79, up 8
paise. "The rupee recovered sharply from the day's low in the second half after Chinese Foreign Ministry spoke of mutual beneficiary
agreement between US President Donald Trump and his Chinese counterpart," said V K Sharma, Head, PCG Capital Markets Group, HDFC
Securities. The rupee on Monday fell by 18 paise to close at 70.87 against the dollar. "Our analysis suggests the fair value of the rupee,
based on productivity-adjusted REER, is in the 67-70 range
If the current trend of lower oil prices lasts through March 2019, we estimate end-FY19 INR against USD could trade in the 69-72 range," UBS
Securities India Economist Tanvee Gupta Jain and Analyst Gautam Chhaochharia said in a research report. Forex dealers said bullish trend in
the equity market as well as easing crude oil prices also supported the rupee's upward movement. Globally, Brent crude, the international
benchmark, was trading 0.23 per cent higher at USD 60.62 per barrel. The BSE benchmark Sensex rose for the second day, gaining over 159
points on hectic buying in banking and IT stocks as easing concerns on the macro-economic front bolstered investors' risk appetite
The broader NSE Nifty too witnessed a rise of 57 points. The 10-year government bond yield remained flat at 7.732 per cent from its previous
close of 7.727 per cent. The dollar remained strong at almost two-week high of 97.19 against the basket of global currencies. Meanwhile,
foreign institutional investors (FIIs) made fresh purchases worth Rs 811.52 crore Tuesday, provisional data showed. Financial Benchmark
India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.9065 and for rupee/euro at 80.4207
The reference rate was fixed at 90.8369 for rupee/British pound and 62.49 for rupee/100 Japanese yen