Indian rupee strengthened against the US dollar on Wednesday due to foreign fund inflows into capital markets. Foreign Institutional Investors (FIIs) emerged as net buyers in the capital market on Tuesday as they bought shares worth Rs 2,024.05 crore, exchange data showed. Moreover, firm domestic equities and overnight losses in the American currency also boosted rupee sentiment. Rupee improved further after data showed India’s current account deficit (CAD) narrowed to $1.3 billion, 0.2% of the GDP in the fourth quarter of FY23 from $16.8 billion, 2% of the GDP in the preceding quarter due to a moderation in the trade deficit. However, US Federal Reserve's hawkish outlook makes investors cautious and limited further gains in rupee.
The partially convertible currency is currently trading at 81.99, stronger by 3 paise from its previous close of 82.02 on Tuesday. The currency touched a high and low of 82.01 and 81.9725 respectively.