The Indian rupee rose again, adding to its gain seen on Friday, as the US dollar weakened and Asian currencies rose. According to the reports, the rupee ended the day 13 paise higher than Friday’s close at 85.09 versus the US dollar. The local currency briefly reached 85 during intra-day trade before pushing higher to a new session high of 84.82, which was also its strongest level in weeks.
The rise of the rupee was along with wider advances in Asian currencies, as the Korean won, Thai baht, and Indonesian rupiah have all risen between 2.5% and 5.5% this month. Yet, despite the rise in the past weeks, the Indian Rupee is down about 0.65% so far in May.
The rupee has rebounded in large part because the Reserve Bank of India (RBI) transferred a surplus of ₹2.69 trillion to the government. The amount wasn’t quite up to some forecasts of ₹3 trillion, but it still greatly increases liquidity in the market. Analysts believe that it will take spending by the government to properly show the effect the surplus has on the financial sector.
The US dollar index dropped 0.1% worldwide to 99.01, thanks in part to President Trump pushing back the EU tariff date to July 9, which eased worries about trade. The Indian rupee, along with other emerging market currencies, was supported by this.
The price of Brent crude oil rose 0.15% to $64.88 per barrel, and WTI rose 0.08% to $61.58, helped by reduced concerns about global trade.
Still, there is worry about the ongoing withdrawal of Foreign Institutional Investor funds. Over the previous week, Indian bonds lost over ₹4,000 crore to global investors, the biggest such withdrawal over the past four weeks, due to the fall in the gap between Indian and US 10-year bond yields.
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