Rupee began Friday on a strong note against the US dollar, gaining 9 paise to 95.65 as the American currency weakened in overseas markets.The recovery, however, remained constrained by elevated crude oil prices, according to forex traders.At the interbank foreign exchange, rupee started the session at 95.69 before strengthening to 95.65, compared with Thursday’s close of 95.74. Rupee had ended Thursday 1 paisa lower after giving up its initial gains.The currency’s movement comes as the Reserve Bank of India expects foreign currency inflows of at least $80 billion from measures announced earlier this year to attract dollars into India. RBI Governor Sanjay Malhotra has indicated that around $56.85 billion has already been mobilised, including $52.3 billion through FCNR(B) deposits.“Governor Sanjay Malhotra indicated that the central bank expects at least USD 80 billion of foreign currency inflows from the measures announced earlier this year to attract dollars into India. So far, around USD 56.85 billion has already been mobilised, including USD 52.3 billion through FCNR(B) deposits,” CR Forex Advisors MD – Amit Pabari said.Despite the inflows, the rupee has seen limited movement since the RBI announced the measures in June, Pabari said.“However, Unlike the famous FCNR(B) scheme of 2013, which sparked an immediate double-digit appreciation in the rupee, this year’s inflows have not translated into meaningful currency strength. Since the RBI announced these measures in June, the rupee has barely responded,” Pabari added.Forex traders said the RBI Governor’s comments provided some reassurance, but the impact of fresh dollar inflows continued to be offset by elevated oil prices, persistent geopolitical uncertainty and a structurally reduced foreign presence.The dollar was also under pressure in overseas markets. The dollar index, which tracks the greenback against a basket of six currencies, was down 0.15 per cent at 98.74, its lowest level since May.Crude prices remained another factor weighing on the rupee. Brent crude, the global oil benchmark, was trading 0.23 per cent lower at $93.56 a barrel in futures trade as tensions in the Middle East continued, along with fresh warnings from US President Donald Trump to countries supporting Iran.“The conflict has already disrupted more than 20 per cent of the region’s refining capacity, while the Strait of Hormuz remains shut, restricting fuel exports from one of the world’s most important energy routes,” Pabari added.Meanwhile, domestic equities opened slightly weaker. BSE Sensex was down 25.97 points at 77,506.51, while NSE Nifty slipped 5.75 points to 24,223.10 in early trade.Foreign institutional investors remained net sellers in the previous session, offloading equities worth Rs 583.36 crore on Thursday, according to exchange data.
