Rupee reaches ₹94.60 2-month high as $137B inflows support
The Indian rupee just reached a two-month high of ₹94.60 against the US dollar, mainly because lots of dollars have been coming in from abroad.
The Reserve Bank of India (RBI) pulled in $137 billion through channels like NRI bank deposits and overseas borrowings, keeping the rupee steady even though it slipped a bit by the end of the day.
$127B FCNR deposits underpin rupee outlook
A big chunk, $127 billion, came from NRIs using FCNR(B) deposits, which helped boost India's foreign exchange reserves and soften the impact of money leaving Indian stocks.
As Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, put it, "Rupee remained strong at 94.48 against the dollar, supported by improved dollar liquidity as FCNR deposits of around $127 billion provide additional buffers to manage sharp currency movements and prevent a rapid fall in the rupee. Going ahead, market participants will closely track key US employment indicators, particularly non-farm payrolls and unemployment data, which could influence the dollar and Fed rate expectations. Rupee is expected to maintain a positive bias, with the range seen between 94.25-95.00."
Looking ahead, experts think the rupee will hover between ₹94.25 and ₹95.00, with upcoming US jobs data likely to set the tone for what happens next.