The Indian currency rupee has done such a feat that the whole world has been shocked. The rupee, which has been heading towards a steady decline, has taken such a leap that it has shattered all 6-month records. If we look at the currency market data, the rupee has given the biggest jump in 6 months and has increased by about 1 rupee. The biggest reason for this surge is the RBI’s reforms, which were announced on Saturday. As expected after the policy meet, the RBI will intervene in the currency market to stop the depreciation of the rupee. Something similar was seen on Saturday. RBI took some decisions that could support the depreciating rupee. Let us also tell you how much the rupee rose against the dollar and what figures were seen.
Biggest rise in rupee in 6 months
On Monday, the rupee strengthened by 96 paise to close at 95.75 (provisional) against the US dollar. This was the biggest one-day increase in six months. This comes after several measures were taken by the Reserve Bank of India (RBI) over the weekend to strengthen the local currency. Forex traders say the RBI’s move will reduce demand for the dollar in the spot market and prevent excessive forex positions, which could support the rupee for some time. However, he said a sustained improvement would depend on crude oil prices, capital inflows and global market conditions.
The rupee opened at 95.61 against the US dollar in the interbank foreign exchange market. During intraday trade, the rupee touched a high of 95.57 and a low of 95.96 against the dollar. At the end of the trading session on Monday, the rupee closed at 95.75 (tentative), up 96 paise from its previous close. The biggest one-day gain was earlier recorded on April 2, when the rupee closed at 166 paise against the dollar. On Friday, the rupee strengthened by 17 paise to close at 96.71 against the US dollar.
RBI Announcement to Manage Rupee
The RBI on Saturday tightened rules related to forex derivatives trade to curb speculation against the rupee. Also, banks were asked to create a 20 percent reserve for dollar purchases above US$2 million.
In another move announced on the derivatives front on Saturday, the RBI said authorized dealers (ADs) should not allow users to rebook any foreign exchange derivative contract (be it deliverable or non-deliverable) linked to the INR that has been canceled earlier.
According to experts, the RBI’s measures – which include a special dollar window for oil marketing companies through select banks and higher costs for certain foreign exchange hedging transactions – are expected to reduce dollar demand in the spot market and curb speculative positions against the rupee.
From oil to stock market data
- Meanwhile, the dollar index – which measures the dollar’s strength against a basket of six currencies – was trading up 0.17 percent at 102.38.
- Global oil benchmark Brent crude was up 0.94 percent to trade at $105.70 a barrel in futures trade.
- In the domestic equity market, the Sensex fell 547.65 points to 71,924.68 while the Nifty closed down 157.10 points to 22,363.35.
- According to exchange data, foreign institutional investors (FIIs) on Friday inflowed Rs. 3,568.90 crore worth of shares were sold.
- Meanwhile, Reserve Bank data released on Friday showed that India’s foreign exchange reserves fell by $12.952 billion to $734.606 billion during the week ending October 2.
- Earlier, in the week ended September 25, total reserves fell by $18.343 billion to $747.557 billion.
