Rupee Rebounds 50 Paise Against US Dollar After RBI Intervention
The Indian rupee recovered significantly on Monday, gaining 50 paise against the US dollar after hitting a historic low in the previous session. The currency settled at 89.16 in the spot market, up from Friday’s close of 89.66.
Forex dealers attributed this recovery to likely intervention by the Reserve Bank of India (RBI). The rupee’s performance stood out as the strongest among Asian currencies during the trading session.
“The rupee gained the most among the Asian currencies on likely intervention from the central bank and MSCI index rebalancing related flows. However, the trend and bias remain weak for the rupee amid foreign fund outflows, widening trade deficit and stronger dollar index against the major currencies.”
Dilip Parmar, Research Analyst at HDFC Securities, noted that while the immediate recovery was positive, underlying pressures continue to weigh on the currency’s outlook.
Key Market Factors
- RBI intervention supported rupee recovery
- MSCI index rebalancing flows provided additional support
- Persistent foreign fund outflows maintain pressure
- Widening trade deficit and strong dollar index challenge stability
