Rupee strengthened by 12 paise to 85.86 against the US dollar in early trade on Monday, supported by strong domestic inflows. However, challenges such as rising crude oil prices and liquidity constraints continue to pose risks, forex traders said.
At the interbank foreign exchange, the rupee opened at 85.93 against the greenback before gaining further to 85.86, marking a 12-paise rise from its previous close. On Friday, the local currency had appreciated by 38 paise to settle at 85.98 per dollar. Foreign institutional investors (FIIs) bought equities worth Rs 7,470.36 crore on a net basis on Friday, according to exchange data.
Meanwhile, the US dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up 0.06 per cent to 104.15. Brent crude, the global benchmark, was trading 0.37per cent lower at USD 71.89 per barrel in futures trade.
“Despite its recent gains, the rupee remains vulnerable to external shocks, particularly crude oil price fluctuations. Brent crude surged towards USD 72 per barrel as geopolitical tensions escalated in the Middle East,” CR Forex Advisors MD Amit Pabari said.
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“The inflows were largely driven by the FTSE March review and robust fundraising activities. State-run enterprises raised Rs 14,000 crore, while Indian states mobilized Rs 40,100 crore through debt sales. Additionally, Non-Banking Financial Companies (NBFCs) issued Rs 16,400 crore in bonds, enhancing liquidity and reinforcing investor confidence — offering a cushion for the rupee,” Pabari added.
India’s foreign exchange reserves rose by USD 305 million to USD 654.271 billion in the week ending March 14, according to RBI data released on Friday. In the previous week, reserves had jumped by USD 15.267 billion to USD 653.966 billion, marking the sharpest weekly increase in two years.
The surge in reserves was partly attributed to the Reserve Bank of India’s USD 10 billion forex swap, helping stabilise the local currency.
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Stock Market Summary: Nifty above 23,470, Sensex gains 460 points
After surging over 4 per cent last week, Indian equity markets opened on a cautious note on Monday (March 24, 2025), tracking weakness in Asian markets. At the opening bell, the Nifty rose 0.5 per cent (124.7 points) to 23,475.1, while the BSE Sensex gained 0.6 per cent (460.72 points) to reach 77,366.23.
(With inputs from agencies)
