USD/INR closed at 73.34 against its open at 73.24. Dollar ended at fresh record high Wednesday on buying by oil importers as Brent crude oil prices hit $85 a barrel amid a strong trading in greenback.
Foreign banks bought dollars tracking a strong greenback and mostly on behalf of foreign portfolio investors who pulled out of local stocks.
"Brent rising to $85/bbl is the main reason. While foreign banks also bought dollars following the movement in the dollar index
The Reserve Bank of India intervened in the forex market around intraday high level to stem further gains in the pair. Following which some exporters also sold dollars capping further gains in the pair.
Brent crude oil prices hit $85 a barrel mark, hovering near its four-year high level, on concerns over supply distortion ahead of the looming US sanctions on Iran to come into effect amid a US-Canada trade deal boosting demand.
Globally, crude oil prices hovered near four-year high amid fears of supply shortage due to loss of Iranian oil upon implementation of US sanctions from early November this year.
Traders will focus on oil inventory reports. The American Petroleum Institute is scheduled to come out with its weekly oil report later in the day, while the US Energy Information Administration will release its crude stockpile data for last week tomorrow.
Brent crude oil futures for December delivery traded 0.08% higher at $84.87 per barrel during Asian trade Wednesday.
The greenback remained firm against its major peers after Federal Reserve Chairman Jerome Powell delivered remarks on monetary policy in the current environment of low inflation and low unemployment in remarks at the annual meeting of the National Association for Business Economics on Monday.
Powell noted forecasts for the unemployment rate to remain below 4% and inflation to remain near 2% through the end of 2020 reflect a remarkably
Sensex provisionally ends 587 points lower with 26 components in the red.