New Delhi: The Indian rupee witnessed a strong rally in early trading on Monday, November 9th. Due to increased demand for the domestic currency, the rupee strengthened by 22 paise to reach 93.70 against the US dollar. This is its highest level in the last seven months. The rupee opened at 93.70 per dollar in the interbank foreign exchange market, after closing at 93.98 in the previous trading session.
Market experts will now be keeping an eye on crude oil prices, foreign institutional investors (FIIs) investments, the dollar index, and global market trends. These factors could determine the rupee’s direction in the coming days.
Last week, the rupee gained more than 1 percent. This was primarily due to increased foreign investment in the Indian stock market and falling crude oil prices.
Foreign Investments in Indian Stock Markets Exceed $4 Billion
Foreign investors invested over $4 billion in the Indian stock market last week. Meanwhile, the stock markets of South Korea and Taiwan saw declines. Both markets were benefiting significantly from investments related to Artificial Intelligence (AI), but foreign investors sold off last week.
Following the Democratic Party’s victory in the US midterm elections on Wednesday, technology stocks in the US and Asian markets saw a selloff, raising fears of a dent in the sector’s growth prospects.
Rupee Supported by a 20% Fall in Crude Oil Prices
Brent crude prices fell by nearly 20 percent last week, making investments in Indian markets attractive to foreign investors.
Foreign capital inflows and crude oil prices have been key factors putting pressure on the rupee over the past few months. If foreign investment in the stock market continues to increase and oil prices remain low, this could strengthen the rupee.
Meanwhile, most Asian currencies weakened on Monday, after better-than-expected US employment data raised the possibility that the US Federal Reserve might raise interest rates in December.