Rupee vs Dollar | Image:Freepik
Rupee versus Dollar: The Indian Rupee surged on Thursday to its highest closing level in more than five months, buoyed by gains in its Asian counterparts and increased dollar inflows into the domestic equity and bond markets.*
Closing at 82.84 against the US dollar, the Rupee marked its strongest finish since Sept. 4, following a notable single-session gain, the largest in almost two months.
Throughout the trading day, the Rupee fluctuated within a narrow range of 82.84 to 82.95, after ending the previous session at 82.97, reaching a three-week high intraday.
Despite brief outages reported on various London Stock Exchange Group (LSEG) news and currency trading platforms globally, traders noted minimal impact on the Rupee’s movement.
Commenting on the currency’s performance, Amit Pabari, Managing Director at FX advisory firm CR Forex, stated, “Overall, there is a higher potential for the Rupee to rise above 82.80, given the robust foreign inflows. But the RBI’s (central bank) firm grip on the currency could limit any further upside. The stability of the Rupee is also aiding confidence among investors for a favorable carry set up.”
Asian currencies saw widespread gains, contributing to the Rupee’s upward trajectory, while the dollar index extended its decline to reach a three-week low.
Despite diminishing expectations of a Federal Reserve rate cut in March or May, as indicated by the central bank’s meeting minutes, the dollar struggled to gain traction, prompting a broader decline.
In the forward market, the dollar/Rupee forward premiums experienced a dip, with the one-year implied yield hitting a two-month low. Traders attributed this movement to the RBI’s upcoming $5 billion swap maturity, possibly leading to a receiving interest and driving down forward premiums. The central bank’s sell dollars/buy Rupees swap is set to mature on March 11.
(With Reuters inputs.)
