2 days ago
Rupee Climbs to Two-Month High on RBI Intervention
The Indian rupee became stronger against the US dollar on Monday and Tuesday.
On Tuesday, it reached 94.95 rupees per dollar, its strongest level in about two months.
The rupee had risen for four days in a row.
Market experts said the Reserve Bank of India helped by selling dollars.
Money flowing into Indian markets also supported the rupee.
A weaker dollar and MSCI-related investment helped on Monday.
Higher oil prices and tensions involving Iran created pressure instead.
Experts expect the rupee to move within a fairly limited range for now.
The rupee rose 21 paise to 95.17 per dollar on Monday, its highest level since August 5.
It gained another 22 paise to 94.95 on Tuesday, extending gains for a fourth consecutive session.
Currency traders and analysts attributed the gains to RBI dollar sales, dollar inflows and MSCI-related equity flows.
The rupee strengthened despite higher oil prices, which rose to $92.16 a barrel on Tuesday amid geopolitical tensions.
Analysts expect the rupee to remain broadly range-bound, with crude prices, dollar movements, intervention and foreign-investor flows shaping its direction.
- Who
- The Indian rupee, the Reserve Bank of India, currency traders and market analysts.
- What
- The rupee strengthened to 95.17 per dollar on Monday and 94.95 on Tuesday, reaching a two-month high.
- Where
- In India's currency market, against the US dollar.
- When
- Monday and Tuesday; Tuesday's level followed four consecutive sessions of gains.
- Why
- Likely RBI dollar intervention, dollar and equity inflows, a softer dollar and a positive growth outlook supported the rupee, while higher oil prices and geopolitical tensions created pressure.
Intervention and Range Management
Market and Growth Drivers
What is driving the rupee's rise?
Intervention and Range Management
Analysts and traders emphasized RBI dollar sales and intervention as key reasons the rupee strengthened and remained within a managed range.
Market and Growth Drivers
Other analysts highlighted dollar inflows, MSCI-related equity flows, the softer dollar and India's positive growth outlook as important sources of support.
Outlook for the currency
Intervention and Range Management
The RBI appears to be allowing modest appreciation while preventing excessive weakness and keeping the rupee broadly range-bound.
Market and Growth Drivers
The rupee's direction will also depend on crude prices, dollar movements, foreign-investor flows and geopolitical developments, which may create pressure or support.
Key facts
- Monday exchange rate
- 95.17 rupees per US dollar
- Tuesday exchange rate
- 94.95 rupees per US dollar
- Monday gain
- 21 paise
- Tuesday gain
- 22 paise
- Tuesday oil price
- $92.16 a barrel, up 1.85%
- Near-term trading band
- Analysts cited a broader range of 94 to 96.5; 94.90 and 94.75 were identified as important levels
- Calendar-year performance
- The rupee was down 5.65% so far this year in Tuesday's report
Quotes
Anil Kumar Bhansali
Head of treasury at Finrex Treasury Advisors LLP
“The RBI’s strategy appears to be preventing excessive rupee weakness. The central bank is therefore likely aiming to keep the rupee range-bound, allowing some movement within a defined range while maintaining overall currency stability, with a slight bias toward appreciation.”
financialexpress.com
“The positive growth outlook is helping offset pressure from higher oil prices and keeping sentiment towards the rupee stable. Going ahead, crude, dollar movement and FII flows will remain key triggers.”
financialexpress.com
Sources
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