Rupee hits six-week high as Jio IPO inflows support recovery

The Indian rupee advanced to a six-week high on Wednesday, tracking foreign inflows on the back of Jio Platforms’ initial public offering as well as steps taken by the Reserve Bank of India to stabilise the local unit.

The rupee firmed up by 29 paise to 94.62 against the US dollar in the early session of trade. The local unit had settled at 94.91 against the greenback yesterday. As reported by the Press Trust of India.

The currency has rebounded after nearing record lows earlier this month, with the central bank intervening to keep a lid on dollar demand and prop up the local forex market.

The Jio Platforms IPO, which opened for subscription on Wednesday, has witnessed a robust subscription from institutions, as dollar flows from foreign investors are likely to lend support to the rupee.

But higher crude oil prices and a firm US dollar capped the currency’s upside. Brent crude settled above $110 a barrel on worries about supply disruptions due to tensions in the Middle East.

Higher oil prices are a concern for India, a major oil importer, as they threaten to put more pressure on its import bill and the rupee.

Investors are also eyeing the Reserve Bank of India’s policy stance after the central bank hiked interest rates earlier this month and indicated it could tighten the policy further.

However, the recovery of the rupee continues to be vulnerable to other external factors such as oil prices and continued demand for dollars.