The rupee strengthened 6 paise against the US dollar in early trade

The rupee rose 6 paise to 72.46 against the US dollar in early trade on Monday and supported the fall in foreign exchange inflows and crude oil prices.

Forex traders said, however, that the opening in domestic equities and the strong dollar’s foreign currency weighed in the rupee.

In the interbank foreign exchange market, the local unit strengthened against the US dollar at 72.47 and gained further basis for bidding at 72.46, an increase of 6 paise from its previous close.

In the previous session, the rupee had closed at 72.52 against the US currency.

Foreign portfolio investors (FPIs) have bought close to $ 2.5 billion of Indian equity so far this month. FPI purchased a net share of $ 179.40 million as of March 18, 2021. For the month of March, FPI was a net buyer of a total of $ 2.454 billion, Reliance Securities has said in a note.

The dollar rose higher after the Turkish lira was reduced to 15% after Turkish President Erdogan replaced the hawkish central bank governor as a critic of high-interest rates. Worryingly, events in Turkey could cause disruption to other financial markets, they also supported the dollar.

Meanwhile, Asian currencies were weak on Monday morning and would become sentimental.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 124.35 points down at 49,733.89, and the broader NSE Nifty closed 11.80 points down at 14,732.20 in early deals.

Meanwhile, the Dollar Index, which estimates the strength of the greenback against a basket of six currencies, rose 0.08% to 91.99.

Brent crude, the global oil benchmark, declined 0.39% to $ 64.28 a barrel.

Foreign institutional investors were net buyers in the capital market on Friday as they bought shares worth ₹ 1,418.43 crore as per exchange data.