Indian Rupee Gains 0.33% Weekly, Ends Two-Week Slide
By Market Desk
The Indian rupee appreciated by 0.33% this week, closing at 95.38 against the US dollar and breaking a two-week losing streak, thanks to RBI intervention.
The Indian rupee concluded the week with gains, breaking a two-week decline to settle at 95.38 against the US dollar on Friday. This marked a 16 paise increase from the previous session, culminating in a 0.33% weekly appreciation.
The currency traded within a narrow range throughout the week, largely influenced by active intervention from the central bank. Market participants observed the rupee’s daily movement averaged 14 paise over the last two weeks.
Key Weekly Figures
- Weekly Close: 95.38 against US dollar
- Weekly Appreciation: 0.33%
- Session Gain: 16 paise
- Weekly Range: 95.38 to 95.75
Ritesh Bhansali, Deputy CEO of Mecklai Financial Services, confirmed the Reserve Bank of India’s strategy, stating the RBI is actively managing the rupee to prevent both significant depreciation and appreciation. This central bank action has effectively kept the currency range-bound.
Support for the domestic currency also came from stable crude oil prices, which saw a marginal decline. Crude oil was down 0.16% to $89.56 per barrel on Friday.
Inflows and Market Dynamics
Foreign deposit inflows are also contributing to the rupee’s strength, especially as a special window for these deposits nears its August 31 closing date. Banks have accumulated $65.4 billion through FCNR(B) deposits by August 21.
Total inflows, including external commercial borrowing, have reached $72.8 billion. Despite these inflows, Amit Pabari, Managing Director at CR Forex Advisors, noted their impact on the rupee is less pronounced compared to 2013, as the RBI is absorbing these funds to build its reserves.
The rupee recorded a 6.4% depreciation year-to-date and 10.3% over the past year. However, it emerged as the fourth best-performing Asian currency during the week.
Looking ahead, Ritesh Bhansali anticipates the rupee will trade between 95 and 96 in the near term. Amit Pabari cautioned that the RBI’s aggressive intervention might not be sustainable long-term, suggesting prudent deployment of reserves will be crucial, particularly amid geopolitical uncertainties.