The rupee appreciated by 5 paise to 83.87 against the US dollar in early trading on Monday, boosted by a weaker American currency in the global market and substantial foreign fund inflows.

Forex traders noted that market participants are keenly awaiting signals from the US Federal Reserve’s policy announcement on Wednesday, with a rate cut being highly anticipated, though the exact size remains uncertain.

Additionally, the rupee has remained stable within a well-defined range due to active intervention by the Reserve Bank of India (RBI), they added.

In the interbank foreign exchange market, the rupee opened at 83.89 and later strengthened to 83.87, marking a 5 paise gain from its previous close.

On Friday, the local unit settled higher by 4 paise at 83.92 against the US dollar.

“Despite a significant drop in the dollar index and crude oil prices remaining under control in recent sessions, alongside inflation figures staying below the Central Bank’s 4 per cent target for the second consecutive month, the rupee has held steady,” CR Forex Advisors MD Amit Pabari said.

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Pabari also noted that the rupee’s stability is largely driven by the RBI’s consistent buying intervention, as seen in the buildup of foreign reserves, which have now reached a historic high of around USD 690 billion.

According to the Reserve Bank of India, the country’s forex reserves surged by USD 5.248 billion, hitting a record high of USD 689.235 billion for the week ending September 6.

In the previous week, reserves had increased by USD 2.299 billion, reaching a then-record of USD 683.987 billion.

Meanwhile, the dollar index, which measures the US dollar’s strength against a basket of six major currencies, dropped 0.26%, settling at 100.85 points.

Brent crude, the international benchmark, increased by 0.15% to USD 71.72 per barrel in futures trading.

In the domestic equity market, the 30-share BSE Sensex rose by 128.95 points, or 0.16%, to 83,019.89 points, while the Nifty gained 46.00 points, or 0.18%, reaching 25,402.50 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, acquiring shares worth Rs 2,364.82 crore, according to exchange data.

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