BUSINESS

Rupee gains most in a day in five years

Oil fall, U.S.-China ‘deal’ spur gains

The rupee posted its best daily gain against the dollar in five years as it appreciated 101 paise or 1.36% to end the day at 72.45 a dollar as compared with the previous close of 73.45.

A combination of factors like ebbing global crude oil prices and a possible U.S.-China trade deal led to the strengthening of the rupee.

“A confluence of factors helped the sharp uptick in rupee today. Falling crude prices, better global risk appetite on U.S.-China trade-related hopes and broad dollar weakness helped the currency. This is the biggest single day gain for the rupee since early September of 2013,” said Madhavi Arora, economist, FX and rates- Edelweiss Securities Ltd.

Rupee was the best performing emerging market currency on Friday after Korean won which appreciated 1.45%. Brent crude, the international benchmark, was trading at $72.98 per barrel.

Falling crude prices will help bridge the current account gap, which is seen a positive for the rupee.

The future trajectory of the rupee could be decided by several external factors, including Brent prices and the mid-term polls in the U.S.

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