Rupee Touches Two-Month High as Strong Growth Supports Currency
The Indian Rupee has gained strength against the US dollar, reaching a two-month high of 94.94 (provisional) on Tuesday. The currency rose by 28 paise from its previous close, driven by robust domestic growth, controlled fiscal slippage, and portfolio inflows.
Forex traders attribute this gain to recent MSCI-linked inflows, which are providing temporary support to the rupee. Additionally, some market participants believe that the Reserve Bank of India (RBI) may have intervened to prop up 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, weak domestic markets and a surge in crude oil prices capped sharp gains.
The dollar index was trading at 99.58, higher by 0.15 per cent, while Brent crude rose by 1.97 per cent to USD 92.27 per barrel in futures trade. Choudhary predicts that the rupee may trade with a slight negative bias amid rising crude oil prices and renewed geopolitical tensions between the US and Iran.