New Delhi: The Indian Rupee strengthened by 33 paise against the US dollar, reaching 92.85 in early trading on Monday, marking a positive start to the week.
Forex analysts pointed to a variety of factors influencing the movement, including persistent foreign fund outflows, the ongoing rise in crude oil prices, and a stronger US dollar. The geopolitical landscape also continues to weigh on market sentiment, contributing to the rupee’s fluctuating performance.
Opening at 93.13 per dollar in the interbank market, the domestic currency gained momentum, rising to 92.85 by mid-morning. This follows a significant rally in the previous session, where the rupee surged by 152 paise to close at 93.18 per dollar, its largest single-day appreciation in years, following the Reserve Bank of India’s (RBI) intervention measures.
On Friday, the domestic financial markets were closed in observance of Good Friday, halting trading activity.
The dollar index, a measure of the greenback’s strength against a basket of six major currencies, climbed by 0.14 percent, reaching 100.17. Meanwhile, Brent crude oil prices edged up by 0.66 percent to $109.75 per barrel, continuing their upward trajectory amid supply concerns.
In local equity markets, the Sensex saw a sharp dip, falling 270.13 points to 73,049.42, while the Nifty declined by 93.60 points to 22,619.50 in early trade.
Adding pressure to the currency market, foreign institutional investors (FIIs) were reported to have offloaded shares worth ₹9,931.13 crore on Thursday.
To curb market volatility, the RBI has implemented new measures restricting banks from offering rupee-linked non-deliverable derivative contracts to customers, both domestic and foreign. However, banks will still be allowed to provide deliverable foreign exchange derivatives for risk management purposes, as long as these contracts are not linked to non-deliverable positions.
In addition, the RBI has imposed a cap of $100 million on the net open positions of authorized dealer banks, aiming to bring greater stability to the foreign exchange market and manage risks associated with the rupee’s value fluctuations.
