Rupee inches up, dollar demand from Indian oil companies likely to cap gains

The rupee has been 'well-supported,' by dollar inflows over the last week, which helped cap the unit's weakness, an expert said

By Reuters

Published: Fri 16 Feb 2024, 9:55 AM

The Indian rupee ticked up on Friday aided by a pullback in the US dollar after economic data came in weaker than expected, but demand for the greenback from Indian oil companies is likely to limit the currency's gains, traders said.

The rupee was at 22.618 against the UAE dirham as of 8.30am, slightly higher compared to its close at 22.627 on Thursday.

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The dollar index was last quoted at 104.42 after dropping 0.4 per cent on Thursday following data which showed that US retail sales fell by the most in 10 months in January and the figures for November and December were revised lower.

The rupee has been "well-supported," by dollar inflows over the last week, which helped cap the unit's weakness around 83.10-83.12 against the US dollar, a foreign exchange trader at a state-run bank said.

Indian oil companies have been buying dollars over the last couple of sessions which is expected to persist on Friday, capping the rupee's gains, the trader added.

Meanwhile, India's merchandise trade deficit moderated to a nine-month low at $17.5 billion in January, while the services surplus rose to $16.8 billion, data released during market hours on Thursday showed.

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