2 hrs ago
Rupee gains for fifth session as foreign inflows bolster currency
India’s rupee became slightly stronger against the US dollar on Thursday.
It rose to ₹94.59, continuing a five-day run of gains.
More money came into India through foreign-currency deposits and other borrowings.
These inflows helped improve the country’s foreign-exchange position.
Foreign investors also bought Indian shares.
A weaker dollar and lower US Treasury yields gave the rupee additional support.
However, higher oil prices and tensions involving the United States and Iran could limit further gains.
Indian stock markets fell on Thursday even as the rupee strengthened.
The rupee rose 14 paise to close at ₹94.59 against the US dollar on Thursday.
It gained for a fifth consecutive session, after rising 22 paise on Wednesday.
Foreign currency non-resident deposits raised $127.23 billion under a special central bank programme.
Including overseas foreign-currency and external commercial borrowings, total inflows reached $136.377 billion.
Analysts cited foreign inflows, foreign institutional buying, a softer dollar and lower Treasury yields as supports, while crude prices and US-Iran tensions posed risks.
- Who
- The Indian rupee, foreign investors, the Reserve Bank of India and market analysts were involved.
- What
- The rupee appreciated 14 paise to close at ₹94.59 against the US dollar.
- Where
- The move occurred in India’s interbank foreign-exchange market.
- When
- Thursday’s trading session; it was the rupee’s fifth consecutive session of gains.
- Why
- Higher foreign-currency inflows, foreign institutional buying, a softer US dollar and lower US Treasury yields supported the rupee.
Factors Supporting Further Gains
Factors Limiting Further Gains
Currency outlook
Factors Supporting Further Gains
Analyst Anuj Choudhary said the rupee could retain a positive bias because of rising foreign inflows, stronger global risk appetite and a softer US dollar.
Factors Limiting Further Gains
Choudhary said elevated crude oil prices and any renewed escalation of US-Iran tensions could cap the rupee’s upside.
Market drivers
Factors Supporting Further Gains
Large foreign-currency deposit inflows, foreign institutional buying, lower US Treasury yields and a stronger yen supported the rupee.
Factors Limiting Further Gains
Brent crude rose amid concerns about US-Iran tensions and possible disruption to oil flows through the Strait of Hormuz.
Key facts
- Closing rate
- ₹94.59 per US dollar, provisional
- Daily movement
- The rupee rose 14 paise
- Five-session performance
- The rupee gained for the fifth straight session
- FCNR(B) inflows
- $127.23 billion mobilised through foreign currency non-resident bank deposits
- Total programme inflows
- $136.377 billion, including overseas foreign-currency and external commercial borrowings
- Dollar index
- 99.22, down 0.38%
- Brent crude
- $96.44 per barrel, up 0.85% in futures trade
- Foreign institutional activity
- Net equity purchases of ₹6,688.37 crore on Wednesday
Quotes
Anuj Choudhary
Research Analyst at Mirae Asset Sharekhan
“However, elevated crude oil prices and any fresh escalation of tensions between the US and Iran may cap sharp upside. Traders may take cues from trade balance, weekly unemployment claims and ISM services PMI data from the US,”
CNBC TV 18
“Indian rupee rose sharply amid huge FCNR deposit inflows and FII buying. Softening of the US dollar and US treasury yields amid sharp appreciation in the Yen also supported the rupee,”
CNBC TV 18
Sources
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