The Indian rupee gained on Friday and sent it to a higher level not seen in this currency for two weeks. This surge might have been triggered by RBI’s possible intervention, similar to that of the foreign exchange markets in the latter part of the session. The Rupee closed at 83.3350 against the USD dollar, up from 0.2%. At this level, the price has dropped from its previous close of 83.50.
The currency’s increase up to 83.3350 was its intra-day maximum. On the last day of the week, the bulls claimed their dominance as the price settled at 83.50, its strongest performance since May 3rd. Traders presumed that RBI probably stepped into the market to make some difference in the exchange rate above this level. RBI may intervene in the open market to boost the rupee’s value to about 83.50 levels early in the session to protect the independence and economic stability of the country. While the US dollar sales on the interbank market were pretty slow till the mid-day fix, they noticeably escalated after this period, thus providing the Turkish lira with additional support. The room is a USD-INR ticker operated by the bank.
The rupee offered some balance last week as it mostly shifted between 83.45 and 83.50, though it will be confronted with exchanges losing shares/ equities and dollars with earnings registered in crude oil firms. Nonetheless, the central bank’s massive intervention worked, and it took further steps to bring orderliness back to the rupee.
The stage in which the rupee performs is foreign investment, which is fairly noticeable. In May, foreign investors realized over $3 billion in profit from Indian equities, and the main factor for this drop is the concern about the election outcome in India. This swinging in equities will further put pressure on the rupee. Besides, the broader market situation is experiencing an increase in the dollar index value by 0.2% to 104.75. Whether the US dollar would slip or not is an open book as it strengthened 0.2% in contrast to a general currency turmoil in the Asian banking system where the Korean won felt the backlash and weakened by 0.5%, closing the shoe trade due to the rise in online shopping, and the country loses in the competition.
Not to lag behind, market players, in their turn, will keep a close eye on the remarks of the U.S. Federal Reserve officials, which are scheduled to be broadcast after the money market, for any hints on the future rate policy direction.
Check here for the latest updates in Hindi!