Rupee Jumps to 89.45 Against Dollar, Powered by Foreign Investment and RBI Support

The USD-INR pair has appreciated by about 2% from its recent lows but is still 5% down on year-on-year basis, analysts say.

Indian Currency Gains Momentum Despite Broader Weakness

The Indian rupee showed continued strength against the US Dollar on Monday. This boost came primarily from heavy foreign institutional buying in India’s massive stock market.

What’s the Rupee’s Position Today?

The rupee commenced trading at 89.53 against the dollar. It then quickly gained ground, strengthening to 89.45. This movement represents a 22-paise rise from its prior closing rate of 89.67. Reports indicate the Reserve Bank of India (RBI) has actively supported the rupee. The RBI sold US dollars through state-run banks in recent trading sessions.

Global and Local Market Indicators

The dollar index measures the dollar’s strength against six major currencies. This index saw a slight 0.04% increase, trading at 98.63. Meanwhile, global oil benchmark Brent crude was also trading higher. It was up by 0.83% at $60.97 per barrel in futures trading. Foreign Institutional Investor (FII) inflows reached a substantial ₹1,830.89 crore on Friday. This figure is based on official exchange data. Furthermore, India’s forex reserves grew significantly. The reserves jumped by $1.68 billion to hit $688.94 billion in the week ending December 12. This is according to the latest RBI data.

Still Down Year-on-Year

The USD-INR currency pair has appreciated by roughly 2% from its recent low points. However, it still shows a 5% drop on a year-on-year basis. This analysis comes from Anil Kumar Bhansali. He is the head of treasury at Finrex Treasury Advisors LLP. “The broader depreciation trend remains despite this short-term gain,” he informed the Press Trust of India.