The Indian rupee rebounded against the US dollar after the Reserve Bank of India (RBI) restricted banks' net open positions in dollars. This move prompted banks to sell dollars, providing temporary support for the rupee amidst ongoing geopolitical tensions and rising oil prices.
The rupee plunged to a fresh low of 93.72 against the dollar on Friday, falling 1.15 per cent in a single session - its sharpest one-day decline since February 24, 2022 - as elevated crude oil prices and strong dollar demand from oil-marketing companies and foreign portfolio investors (FPIs) weighed on the currency.
The Indian rupee weakened to a record intra-day low against the US dollar due to a strengthening greenback, continuous foreign capital outflows, and elevated global crude oil prices amidst the West Asia conflict.
The Indian rupee weakened against the US dollar due to sustained foreign fund outflows and uncertainties in West Asia, although lower crude oil prices and a positive opening in domestic equity markets limited the losses.
The Indian rupee rebounded against the US dollar after the Reserve Bank of India (RBI) restricted banks' net open positions in dollars. This move prompted banks to sell dollars, providing temporary support for the rupee amidst ongoing geopolitical tensions and rising oil prices.
The rupee fell 23 paise against the greenback to settle at a new all-time low of 91.01 (provisional) on Tuesday, weighed down by relentless foreign fund outflows, no breakthrough in India-US trade deal, and persistent US dollar buying.
The rupee plunged 38 paise to close at an all-time low of 90.32 against the US dollar on Thursday amid uncertainty over the India-US trade deal. Forex traders said the rupee is expected to trade with a negative bias as the delay in the trade deal between India and the US may continue to dent investor confidence.
The rupee breached 90-levels against the greenback for the first time on Wednesday, falling 6 paise to 90.02 in early trade, as banks kept buying US dollars at higher levels and FII outflows continued.
Importers are rushing to hedge their dollar positions amid the sharp depreciation of the rupee against the American currency and expectations of further volatility even as exporters are holding off after suffering mark-to-market (MTM) losses on earlier hedges.
'The E20 usage accrues the huge benefit to the nation, to the society, to the farmer, to the environment, to the exchequer and all of us'
The RBI added roughly 3 tonnes in 2025, taking its gold reserves to 879 tonnes as of January 31, 2025.
The reserves rose to $501.70 billion helped by a whopping rise in foreign currency assets, the latest data from the Reserve Bank of India.
The rupee had tumbled by 33 paise to close at 54.47 against the US currency in the previous session on Friday, due to a firm dollar overseas.
'A repo cut will be very good for the market as it will mean that everything is being done to spur growth in these uncertain times.'
The Reserve Bank has told the International Monetary Fund (IMF) that the objective of frequent interventions in the forex market is to curb excessive volatility, dismissing the Fund's rationale for reclassifying India's exchange rate regime. The IMF, following the Article IV consultation with the Indian authorities, reclassified the status of the exchange rate regime to "stabilised arrangement" from "floating" for period between December 2022 to October 2023. India's Executive Director at IMF K V Subramanian and Senior Advisors Sanjay Kumar Hansda and Anand Singh questioned the selection period adopted by the Fund for analysis and also reclassification of the country's exchange rate regime.
'If it doesn't, it will continue with measures to infuse liquidity, signalling a new cycle,' predicts Tamal Bandyopadhyay.
A weak dollar against major world currencies supported the domestic unit.
After two months of net outflow, foreign investors turned buyers in June, infusing Rs 26,565 crore in Indian equities, driven by political stability and a sharp rebound in markets. Looking ahead, attention will gradually shift towards the budget and Q1 FY25 earnings, which could determine the sustainability of FPI flows, Vipul Bhowar, Director, Listed Investments, Waterfield Advisors, said.
A combination of factors, including heavy investments in US Treasury bonds and dollar sales at a healthy profit, facilitated the Indian central bank in transferring a record surplus of Rs 2.11 trillion to the government for 2023-24 (FY24). The RBI's dollar purchases increased in FY24, supported by robust capital inflows endorsing the economy's health.
The rupee on Monday failed to maintain initial gains and ended lower by five paise at 60.21 against the dollar on fag-end demand for the US currency from banks and importers.
The rupee had retreated from three-week high and ended six paise down at 60.67 against the dollar on demand from importers for the US currency in Thursday's trade.
A weak dollar overseas failed to restrict the rupee's decline, a forex dealer said.
The rupee resumed higher at 61.57 per dollar against the previous close of 61.59 and dropped immediately to 61.70 on initial dollar demand from banks and importers.
The RBI is widely expected to raise its key repo rate by 25 basis points to 8.00 per cent on Wednesday, its third such hike in four months after recent data showed both wholesale and retail inflation at multi-month highs.
The rupee had ended almost flat at 61.41 against the Greenback in the previous session on Wednesday on alternate bouts of buying and selling.
In dull trade, the rupee on Monday ended a mere two paise lower at 60.20 against the US dollar on weak local equities and imported-driven demand for the American currency.
A strengthening dollar overseas also kept the rupee under pressure amid demand from importers. Goldman Sachs followed JP Morgan, HSBC and Nomura in cutting India's economic growth forecast and also said it expects the rupee to touch 72 against the dollar in the next six months.
However, FII outflows of Rs 545 crore (Rs 5.45 billion) capped the gains in the rupee, which had slumped by 126 paise in past two days.
Foreign institutional investors pulled out Rs 86.66 crore (Rs 866.6 million) from local stocks on Monday, as per provisional BSE data.
Tracking local stocks, rupee on Tuesday regained 19 paise to end at 61.85 against dollar as reports of easing geopolitical tension between Russia and Ukraine helped emerging market currencies script a smart recovery.
Continuing its range-bound movement for the fourth session, the rupee today closed up by two paise at 59.25 ahead of industrial output and retail inflation data.
The rupee on Thursday appreciated 20 paise to end at 62.37, its highest in two weeks, on positive trends in local equities and fresh dollar selling by exporters.
The US stimulus programme has been credited with fuelling a global equities rally for most of the year.
Dollar sales by exporters and firm local equities also supported the local currency.
The rupee gained for the second day, climbing 23 paise to a one-week high of 62.07 against the dollar on Wednesday, amid a modest recovery in local stocks and sales of the US currency by exporters and banks.
The local currency had lost 119 paise in the past five sessions on rising worries over current account gap and fears that withdrawal of US stimulus will hit inflows from overseas.
At the Interbank Foreign Exchange market, the domestic currency resumed stable at its overnight close of 60.07 a dollar and immediately touched a low of 60.09.
The rupee on Tuesday gained 29 paise to close at seven-month high of 60.48 against the dollar on sustained selling of the US currency by exporters and banks.
The RBI recently met with a handful of foreign banks and asked them to stop acting as market-makers for rupee NDFs, according to three bankers involved in the discussions.
Capital inflows continued to aid the rupee's rise, although a strong dollar overseas capped the gains.
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