CA Sansaar
Rupee Strengthens to 92.93 as RBI Move and Oil Dip Boost Sentiment
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The rupee bounced back above the 92 mark, settling at 92.93 against the dollar, which is 27 paise higher than its previous close. This upward movement came amid reports suggesting that the RBI has advised oil companies to avoid buying dollars from the open market and instead use a credit facility arranged through SBI.
This step is expected to reduce a significant chunk of demand in the interbank forex market. Market participants noted that while the immediate rise was driven by this policy-related development, it may also indicate that the RBI is bracing for potential volatility in the foreign exchange market over the medium term. However, the central bank has not officially confirmed any special arrangement for oil companies.
Separately, news about the reopening of the Strait of Hormuz for shipping, which emerged after market hours, further supported sentiment. Traders believe that the resulting decline in crude oil prices could provide an additional boost to the rupee.
Having been the weakest among Asian currencies in the first quarter, the rupee has staged a strong recovery since late March and is now among the better-performing currencies in the region.
In addition, India’s foreign exchange reserves increased by $3.8 billion to around $701 billion in the week ended April 10, according to RBI data. Earlier, reserves had touched a record high of $728.5 billion in the week ended February 27, prior to the escalation of tensions in West Asia.
This step is expected to reduce a significant chunk of demand in the interbank forex market. Market participants noted that while the immediate rise was driven by this policy-related development, it may also indicate that the RBI is bracing for potential volatility in the foreign exchange market over the medium term. However, the central bank has not officially confirmed any special arrangement for oil companies.
Separately, news about the reopening of the Strait of Hormuz for shipping, which emerged after market hours, further supported sentiment. Traders believe that the resulting decline in crude oil prices could provide an additional boost to the rupee.
Having been the weakest among Asian currencies in the first quarter, the rupee has staged a strong recovery since late March and is now among the better-performing currencies in the region.
In addition, India’s foreign exchange reserves increased by $3.8 billion to around $701 billion in the week ended April 10, according to RBI data. Earlier, reserves had touched a record high of $728.5 billion in the week ended February 27, prior to the escalation of tensions in West Asia.
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