Rupee rises 12 paise to 83.17 against U.S. dollar in early trade

On the domestic equity market, both the benchmark indices scaled new peaks. The 30-share BSE Sensex was trading 51.21 points, or 0.07% higher at 75,469.25 points. The broader NSE Nifty breached the 23,000 level in initial trade.

The rupee appreciated by 12 paise to 83.17 against the U.S. dollar on May 24, tracking a bullish trend in domestic equities, wherein benchmark indices scaled new peaks.

Forex traders attributed the rally to ₹2.11 lakh crore record dividend by the RBI to the government for the fiscal ended March 31. It was more than double the budgeted expectation, helping shore up revenue ahead of a new government taking office.

At the interbank foreign exchange market, the local unit opened at 83.26 and gained further ground to trade at 83.17 against the greenback, registering a gain of 12 paise from its previous closing level.

The forex market was closed on Thursday on account of 'Buddha Purnima'.

On Wednesday, the rupee appreciated by 2 paise to settle at 83.29 against the U.S. dollar.

After a trading holiday on Thursday, the Indian rupee was on a strong footing following a big transfer of ₹2.11 lakh crore in the form of dividend from the Reserve Bank of India (RBI) to the Union government, which would improve not only government finances but also allow leverage to spend more on infrastructure, said Anil Kumar Bhansali Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 105.11, higher by 0.01%.