Rupee Almost Breaches ₹87/$, Recovers with RBI ‘Support’ | Current Affairs | Vision IAS

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Rupee Almost Breaches ₹87/$, Recovers with RBI ‘Support’

1 min read

Rupee's Movement and Currency Market Dynamics

The rupee experienced a significant decline, nearing the 87-mark, reflecting broader overseas disinterest in Indian risk assets compared to robust performances in other Asian markets.

Factors Influencing the Rupee's Decline

  • Dollar Demand: Importers' demand for dollars increased, adding pressure to the rupee.
  • Overseas Investors: There was a net sale of over ₹28,000 crore in the cash market by foreign investors, despite $500 million of provisional buying on Tuesday.
  • US Tariffs: Potential trade impacts due to higher US tariffs also affected the rupee.

Market Reactions and Interventions

  • The rupee opened at 86.9050 and weakened to 86.9875.
  • The Reserve Bank of India intervened to prevent the currency from breaching the 87 level.
  • The closing rate was ₹86.95 against the dollar, about 1% weaker compared to the previous day's close.

Investor and Currency Trends

  • Foreign Institutional Investors (FIIs) sold local stocks worth ₹3,938 crore on a net basis recently.
  • In February, overseas investors were net buyers for only 2 out of 14 trading sessions.
  • The dollar index, which had previously hit a high of 110, rose 0.35% to 106.95, indicating the US currency's strength.
  • Tags :
  • Rupee Depreciation
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