Rupee Gains 14 Paise Against Dollar on RBI Support Despite Global Pressures
Rupee rises against dollar, supported by RBI measures, volatility persists.
The Indian rupee strengthened by 14 paise to close at 93.04 (provisional) against the US dollar on Monday, supported by recent measures from the Reserve Bank of India (RBI) aimed at curbing speculative activity and stabilising currency volatility. The domestic currency showed resilience despite persistent global headwinds.
At the interbank foreign exchange market, the rupee opened at 93.13 and gained momentum during the session to touch an intraday high of 92.79 against the greenback. This follows a sharp rally last week, when the rupee recorded one of its steepest single-day gains in recent years, rising 152 paise to settle at 93.18 after the RBI announced steps to tighten rules in the onshore forward market.
Market participants attributed the latest gains to the central bank’s move to cap banks’ net open positions at USD 100 million, a step seen as limiting speculative trades. However, forex traders cautioned that underlying pressures remain, including sustained foreign capital outflows, a relatively strong US dollar, and elevated crude oil prices.
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Global geopolitical tensions continue to weigh on currency markets. Recent developments involving the United States and Iran, including warnings linked to the Strait of Hormuz, have contributed to uncertainty and volatility. Meanwhile, the dollar index was marginally lower at 99.87, and Brent crude prices stood at USD 107.29 per barrel, reflecting ongoing concerns about energy supply disruptions.
On the domestic front, equity markets posted gains, with the BSE Sensex rising 787.30 points to 74,106.85 and the NSE Nifty advancing 255.15 points to 22,968.25. Despite the positive sentiment in equities, foreign institutional investors remained net sellers, offloading shares worth ₹9,931.13 crore in the previous session, according to exchange data.
India’s macroeconomic indicators presented a mixed picture. The country’s forex reserves declined by USD 10.288 billion to USD 688.058 billion in the week ended March 27, while services sector growth slowed to a 14-month low, as reflected in the HSBC India Services PMI easing to 57.5 in March. Analysts expect the rupee to witness short-term appreciation, though its broader trajectory will depend on global liquidity conditions, crude price movements, and geopolitical developments.
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