Rupee rises 8 paise to 87.50 against US dollar in early trade

Mumbai: The rupee appreciated 8 paise to 87.50 against the US dollar in early trade on Monday, tracking a weak American currency, as investors await cues from the upcoming talks between Russia and the US.

Forex traders said the Indian rupee opened with small gains on Monday and is expected to remain within a range of 87.25/87.80 while markets are in a wait-and-watch mode for the US and India CPI inflation and the US-Russia talks on August 15.

At the interbank foreign exchange, the domestic unit opened at 87.56 against the US dollar, then touched an initial high of 87.50, higher by 8 paise over its previous close.

On Friday, the rupee pared its intra-day losses and ended flat at 87.58 against the US dollar.

Meanwhile, Brent crude prices fell 0.48 per cent to USD 66.27 per barrel in futures trade.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.11 per cent to 98.07.

Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP said the US-Russia talks on August 15 could solve India's problem of additional 25 bps tariffs by the US if a ceasefire happens between the two nations.

India on Saturday welcomed next week's summit talks between US President Donald Trump and his Russian counterpart Vladimir Putin on the Ukraine war, and reaffirmed Prime Minister Narendra Modi's consistent position that it is not an "era of war".

India has been consistently calling for ending the Russia-Ukraine conflict through dialogue and diplomacy.

"Meanwhile, as the Reserve Bank of India (RBI) protects weakness in the rupee by selling dollars, exporters may sell their near-term receivables and importers may buy cash/weekly positions at the lows for the day," Bhansali said.

Meanwhile, India's forex reserves dropped by USD 9.322 billion to USD 688.871 billion for the week ended August 1 in one of the highest declines in the recent past, the RBI data showed on Friday.

The overall reserves rose by USD 2.703 billion to USD 698.192 billion in the previous reporting week.

In the domestic equity market, Sensex climbed 104.84 points to 79,962.63 in early trade, while the Nifty was trading up 55.85 points to 24,419.15.

Foreign institutional investors (FIIs) turned net buyers after several days and purchased equities worth Rs 1,932.81 crore on Friday, according to exchange data.