There is a continuous increase in the prestige of the rupee in the ‘currency ring’. The rupee has reached a high of almost a month against the dollar. Besides, the level of 93 has improved and now stands in the range of 92. In fact, in early trade on Monday, the rupee strengthened by 33 paise to 92.85 against the US dollar after RBI tightened rules to curb speculative positions, limiting banks’ net open positions to USD 100 million. However, global developments still remain a risk. Forex traders said the rupee remained under pressure due to continuous foreign capital outflows, strengthening dollar and rising crude oil prices amid unstable geopolitical situation. Let us also tell you what kind of data is being seen in the currency market regarding the rupee.
tremendous rise in rupee
In the Interbank Foreign Currency Exchange market, the Indian rupee opened at 93.13, then strengthened further and reached the level of 92.85 against the dollar, which is 33 paise more than its previous closing price. On Thursday, the rupee recorded its biggest single-day gain in many years and closed 152 paise higher at 93.18 against the US dollar. This happened after the Reserve Bank took several steps to keep banks away from onshore forward markets. Equity and forex markets remained closed on Friday due to Good Friday. Global tension is keeping pressure on the rupee. US President Donald Trump has escalated tensions with Iran, and has given a deadline of Tuesday to reopen the Strait of Hormuz. Also warned that if this is not followed, its power infrastructure may be attacked.
Will the rupee come to the level of 91?
CR Forex Advisors MD Amit Pabari said that on one hand, RBI’s steps are clearly working. As banks are reducing their dollar positions ahead of the April 10 deadline, the rupee may strengthen further towards 91.5092.00. On the other hand, global risks cannot be ignored. Pabari further said that if geopolitical tensions persist and oil prices remain high, India’s macro balance, trade deficit, current account deficit and fiscal position may again come under pressure. He said that in such a situation, the rupee may find it difficult to maintain its gains and after stabilizing at lower levels, it may move back towards the 94 level. But the big picture is clear, instability will persist.
From dollar to stock market
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, was trading 0.14 per cent higher at 100.17. Brent crude, the global benchmark for oil, was trading 0.66 percent higher at US $ 109.75 per barrel in futures trade. Talking about the domestic stock market, Sensex fell 270.13 points to 73,049.42 in early trade, while Nifty fell 93.60 points to 22,619.50. According to exchange data, foreign institutional investors sold shares worth Rs 9,931.13 crore on a net basis on Thursday.