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At the interbank foreign exchange, the rupee opened at 85.93 against the greenback, then gained some ground and touched 85.85 at around 11:58 am, up 13 paise from its previous close.
The Indian rupee on Monday appreciated by 13 paise to 85.85 against the US dollar amid strong domestic inflows and a weaker US dollar.
The Indian rupee on Monday appreciated 13 paise to 85.85 against the US dollar during the intra-day trade on Monday, amid strong domestic inflows and a weaker US dollar. The rupee is at the highest level against the dollar since January 8, 2025, when the rupee was at the same 85.85 level.
At the interbank foreign exchange, the rupee opened at 85.93 against the greenback, then gained some ground and touched 85.85 at around 11:58 am, up 13 paise from its previous close.
On Friday, the rupee appreciated 38 paise to close at 85.98 against the US dollar.
In the past few months since September, the rupee has fallen by over 4 per cent due to a rise in dollar amid Trump’s likely inflationary policies and FII continuous outflows due to Indian equities sell-off. On February 10, the Indian currency hit near the 88-mark for the first time in history to hit 87.94 against the dollar.
However, since February 10 lows, the rupee has started rising with a volatility initially and has recovered by over 2.5 per cent to hit 85.85 mark, the level last seen on January 8, 2025.
The rupee was at 83.48 to a dollar on September 23, 2024.
Why Is Rupee Rising?
The rupee recovery comes as the US dollar index, which gauges the greenback’s strength against a basket of six currencies, has eased to below 104, compared with around 110 in February.
On Monday, the dollar index was trading lower by 0.1 per cent to trade at 103.98.
The fundraising by companies and FII inflows have also impacted the local currency positively, apart from the RBI intervention.
Meanwhile, foreign institutional investors (FIIs) purchased equities worth Rs 7,470.36 crore on a net basis on Friday, according to exchange data.
“The inflows were largely driven by the FTSE March review and robust fundraising activities. State-run enterprises raised Rs 14,000 crore, while Indian states mobilised Rs 40,100 crore through debt sales. Additionally, non-banking financial companies (NBFCs) issued Rs 16,400 crore in bonds, enhancing liquidity and reinforcing investor confidence — offering a cushion for the rupee,” CR Forex Advisors MD Amit Pabari said.
In the previous reporting week, the overall reserves rose by $15.267 billion to $653.966 billion and registered the sharpest weekly rise in two years. The spike in foreign reserves was partly attributed to the $10 billion forex swap done by the Reserve Bank of India.
However, Pabari said that despite its recent gains, the rupee remains vulnerable to external shocks, particularly crude oil price fluctuations. Brent crude surged towards $72 per barrel as geopolitical tensions escalated in the Middle East.
Traders also said lurking risks — ranging from crude oil prices to liquidity constraints — continue to pose challenges for the local unit.
Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, said, “The auction for a buy-sell swap of $10 billion will be taken up by the RBI today which will provide Rs 86,000 crore of durable liquidity for 3 years to the market. As we approach the month-end, quarter-end and year-end, some demand should come from the dollar-rupee pair as the RBI may also want to square up its positions instead of rolling it over as it happened in January and February month ends this year.”
The rupee, which has gained in the last week by about 1.2%, is expected to consolidate its gains before we see the next move. The opening is around 85.95 today with a range of 85.80 to 86.30, he added.
