Rupee opens higher at 73.89/$ on weak US dollar, easing oil prices

Positive global cues helped lift rupee. The dollar index, which measures the greenback against a basket of six major currencies, was down 0.2 percent while oil prices fell early, extending losses in previous sessions, amid signs of rising supply.

The currency was under pressure in the previous session amidst growing furor between the RBI and the government. However, the rupee pared some of its losses to reach the day’s high of 73.79 Wednesday after the Finance Ministry in a statement stressed that the government has “nurtured and respected” the autonomy of the central bank and has been holding extensive consultations with it on many issues.

Despite easing concerns, unabated capital outflows by foreign funds continued to dampen the sentiment, according to market experts.

Foreign funds pulled out Rs 1,592.02 crore from the capital markets on a net basis, while domestic institutional investors bought shares worth Rs 1,363.04 crore Tuesday, provisional data showed.

The rupee is the worst performing emerging market currency having lost almost 15 percent since January this year. Between April and September the rupee has plummeted more than 7 percent to the dollar.

In debt markets, the yields on the 10-year government bonds fell 0.27 percent to 7.83 percent after closing at 7.85 percent on Wednesday. Bond yields and prices move in opposite directions.