Rupee Rallies on Record Dollar Inflows Amid RBI Support Measures
The Indian rupee has reached its highest level in two months after experiencing significant dollar inflows. The RBI announced that lenders had collected $127 billion in dollar deposits through a special programme targeting overseas citizens, surpassing the $80 billion estimate provided by RBI Governor Sanjay Malhotra last month.
This influx of funds contributed to a total of $136 billion in dollar inflows, including from two other programmes. According to Michael Wan, senior currency analyst at MUFG Bank Ltd, 'the key message to clients was that the risk of sharp rupee depreciation had been reduced by the RBI’s foreign-exchange measures.'
As a result, the rupee has strengthened, reaching 94.30 against the US dollar and becoming the second-best performing currency in Asia over the past month. Shinhan Bank suggests it could strengthen further to around 93.50 in the coming days.