New Delhi, Oct 15: The Indian rupee strengthened by 32 paise to 94.85 against the US dollar in early trade on Thursday, extending its recent gains amid continued support from the Reserve Bank of India's forex management measures and a softer greenback.
The domestic currency opened at 94.91 against the American currency.
The rupee has benefited from the RBI's structural interventions in the foreign exchange market, liquidity-tightening steps and unwinding of long-dollar positions by traders.
Earlier in October, the Reserve Bank tightened rules governing forex derivatives trades to curtail speculative bets against the rupee and asked banks to create a 20 per cent reserve for dollar purchases of over $2 million.
In another set of measures announced earlier on the derivatives front, the RBI said authorised dealers should not permit users to rebook any foreign exchange derivative contract involving INR, whether deliverable or non-deliverable, which has been cancelled.
The rupee had settled 19 paise higher at 95.16 per dollar in the previous session.
According to experts, the local currency has moved decisively out of the 95.50-95.00 trading band with the next key level seen around 94.80. A sustained move below this level could create room for additional appreciation, aided by lower direct dollar demand from oil marketing companies and improved market sentiment.
Support for the rupee also came from favourable global cues.
Currency analysts expect the Indian currency to trade in the 95.60-97.50 per dollar range by end-2026 with most projections clustering around the 96-97 per dollar mark.
The dollar index, which measures the greenback against a basket of major currencies, declined to 101.99.
Additionally, international oil benchmark Brent crude declined nearly 2 per cent to $104.30 per barrel.
Domestic equities also traded higher with benchmarks Sensex and Nifty rising more than 1 per cent each. Sensex was seen at 73,836.71, up over 1,000 points or 1.45 per cent, while Nifty was trading at 22,929.55, up 300 points or 1.36 per cent.
--IANS