3 hrs ago
Rupee Gains as Inflows Support Currency Despite Oil Risks
The Indian rupee became slightly stronger against the US dollar on Friday.
It rose to 94.46 rupees for one dollar.
This was the fifth day in a row that the rupee had gained.
More money flowing into India helped support the currency.
The Reserve Bank of India was also reported to be actively supporting the rupee.
However, oil prices went up because of concerns about tensions between the United States and Iran.
More expensive oil can make it harder for the rupee to keep gaining.
Indian stock markets also rose, and foreign investors bought Indian shares.
Experts said the rupee could weaken again if oil prices rise sharply.
The rupee gained 5 paise to 94.46 against the US dollar in early Friday trade.
The currency has strengthened for five consecutive sessions, gaining 22 paise on Thursday.
Foreign-currency deposits and related borrowings generated total inflows of USD 136.377 billion.
Higher crude prices and renewed US-Iran tensions could limit further rupee gains.
Brent crude rose to USD 95.90 per barrel, while Indian shares and foreign institutional buying also strengthened.
- Who
- The Indian rupee, the US dollar, foreign investors, the Reserve Bank of India, and currency-market traders.
- What
- The rupee gained 5 paise to reach 94.46 against the US dollar in early trade.
- Where
- The interbank foreign exchange market in India.
- When
- Friday morning; the rupee had also gained 22 paise on Thursday after five consecutive sessions of gains.
- Why
- Rising foreign inflows and greater risk appetite supported the rupee, while higher crude prices and renewed US-Iran tensions posed risks.
Factors Supporting Further Gains
Factors Limiting Further Gains
Foreign inflows and central-bank support
Factors Supporting Further Gains
Forex traders said strong underlying inflows and aggressive Reserve Bank of India intervention could help the rupee strengthen.
Factors Limiting Further Gains
The article notes that the rupee’s gains remain exposed to changes in external conditions despite the inflows.
Oil prices and geopolitical tensions
Factors Supporting Further Gains
Improved risk appetite and rising foreign investment supported demand for Indian assets and the rupee.
Factors Limiting Further Gains
Higher Brent crude prices and renewed United States-Iran tensions could raise pressure on the rupee and push the dollar-rupee rate toward 95.00, 95.50, or 96.00, according to Amit Pabari.
Key facts
- Rupee rate
- 94.46 against the US dollar in early Friday trade
- Daily movement
- Up 5 paise from the previous close
- Previous close
- 94.51 per US dollar on Thursday
- Total inflows
- USD 136.377 billion through foreign-currency deposits and related overseas borrowings
- Brent crude
- USD 95.90 per barrel, up 0.40% in futures trade
- Dollar index
- 99.05, up 0.15% on safe-haven demand
- Foreign equity buying
- Foreign institutional investors purchased Indian equities worth Rs 2,345.87 crore net on Thursday
Quotes
Amit Pabari
Managing director of CR Forex Advisors
“Overall, the FCNR story has given the rupee a strong shot in the arm, but the underlying fundamentals still carry their share of risk. 94.00–94.20 remains a strong support zone. Any negative surprise, especially from the oil front, could pull USDINR back up towards 95.00, 95.50 and eventually 96.00.”
deccanchronicle.com
Sources
Related news
Rupee Gains as Softer Dollar Counters Oil and Geopolitical Risks
Rupee rises for fifth session amid foreign inflows
Rupee Recovers as Easing Brent Prices Offset Dollar Pressure
Rupee Strengthens Against Dollar on Growth, Inflows and RBI Support
Rupee Holds Near 95.64 Amid Iran Sanctions, Oil Risks
Indian Rupee Hits 10-Week High on Inflows, Softer Dollar
Rupee Jumps 67 Paise as Dollar Inflows Boost Sentiment
BRICS Leaders Eye Local-Currency Trade, Not Common Currency
Rupee Slips Against Dollar Amid Oil and Tension
Rupee Climbs to Two-Month High on RBI Intervention