Rupee Hits Two-Month High as Domestic Growth Boosts Currency

The Indian rupee gained strength against the US dollar on Tuesday, rising to its highest level in nearly two months. The rupee closed at 94.94 against the dollar, a gain of 28 paise from its previous close. This increase was attributed to robust domestic growth, controlled fiscal slippage, and portfolio-related inflows.

Forex traders pointed out that recent MSCI-linked inflows are providing temporary support to the rupee. Additionally, some believe the Reserve Bank of India (RBI) may have intervened to bolster the domestic currency.

Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, noted that the Indian rupee gained on possible intervention by the RBI and upbeat macroeconomic data. However, he also cautioned that weak domestic markets and a surge in crude oil prices capped sharp gains.