Rupee Surges to Two-Month High on Strong Inflows Exceeding Expectations

The Indian rupee has made a significant gain, reaching a two-month high of Rs 94.30 against the US dollar on September 3.

This increase comes after the Reserve Bank of India announced that banks had mobilized more than $127 billion through Foreign Currency Non-Resident Bank (FCNR(B)) deposits under its special foreign exchange mobilization measures.

The inflows exceeded market expectations, which were around $90 billion, and totaled about $136 billion when including external commercial borrowings and overseas foreign currency borrowings.

Kunal Sodhani, head of treasury at Shinhan Bank, believes the rupee could trade in a range of Rs 94.10-Rs 95.50, with a sustained break below Rs 94.10 potentially leading to Rs 93.50.