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The Indian rupee strengthened to nearly one-month high, supported by likely intervention from the central bank and equity-related inflows, said market participants. The domestic currency rose 21 paise to 95.17 against the dollar on Monday, its highest level since August 5, according to Bloomberg.
“The rupee was supported by the RBI intervention and MSCI-related inflows. A softer dollar index also aided the currency, with these factors together driving the rupee’s gains today (Monday),” said Dilip Parmer, research analyst, HDFC Securities.
The Indian rupee was the third top-performing currency compared to its Asian peers on Monday after South Korean won and Japanese yen.
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Oil prices rose 2.32% to $91.38 a barrel on Monday amid fresh geopolitical tensions, putting pressure on the rupee and leading it to open lower.
Parmer expects the rupee to trade in the range of 94.90- 95.50 in the near-term. “Going ahead, the RBI intervention, geopolitical uncertainties, and the crude oil prices are likely to remain the key drivers of the rupee.” He added that inflows via FCNR (B) deposits are also expected to support the currency.
The rupee recorded a monthly gain of 0.23%, trading within a narrow band between 95.13 and 95.75. Over the past month, the daily movement averaged at 16 paise. In the calendar year so far, the rupee declined 6.4% and over the past year, it fell 10.26%.
“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,” said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors LLP.
TOPICSRBIrupeeThis article was first uploaded on August thirty-one, twenty twenty-six, at eight minutes past seven in the evening. © IE Online Media Services (P) Ltd