In recent times, India’s currency rupee had to face a very negative environment. He even said that after Iran’s currency, the one that has suffered the most or rather weakened, is the Indian rupee. But in the last two days, the entire atmosphere of rupee has changed in the international currency market. After reaching close to 97, the rupee has made such a bounceback that the world is surprised to see.
After closing with a rise of 50 paise on Thursday, the rupee has witnessed a rise for the second consecutive day on Friday. If we look at the figures, if we include the increase of Thursday and now Friday, an increase of about 70 paise has been seen. If experts are to be believed, if the situation continues like this then the rupee may see a rise of another Re 1 in the coming days. Let us also tell you how the rupee has brought the dollar to its knees in the international market.
Rupee rose for the second consecutive day
In early trade on Friday, the rupee rose 18 paise to 96.18 against the US dollar due to slight softening in crude oil prices, initial signs of easing geopolitical tensions and active intervention of the RBI in the market. Forex traders said markets got some relief after comments by US Secretary of State Marco Rubio, in which he indicated that diplomatic talks related to the situation in Iran are moving in a positive direction. Although Rubio cautioned that he did not want to be “too optimistic,” his comments were enough to calm the markets for a while. As a result, Brent crude oil softened near US$104 levels, reducing immediate pressure on the rupee, traders said.
Rupee’s dominance visible in currency market
At the Interbank Foreign Currency Exchange market, the rupee opened at 96.30 against the US dollar, and then touched 96.18 in early trade, 18 paise higher than its previous close. On Thursday, the rupee had improved by 50 paise from its lowest ever closing price to close at 96.36 against the US dollar. CR Forex Advisors MD Amit Pabari said that another major reason for the improvement in the rupee is the increasing confidence regarding the RBI’s proposed US $ 5 billion buy-sell swap auction on May 26.
The move is expected to increase rupee liquidity in the banking system and improve the RBI’s ability to control excessive currency volatility. Pabari further said that this has further strengthened the market’s confidence that if the global situation worsens, the central bank is actively prepared to control the volatility smoothly.
stock market boom
- Meanwhile, the dollar index, which measures the strength of the US dollar against a basket of six currencies, was trading 0.01 per cent lower at 99.24.
- On the other hand, in the international market, Brent crude, the crude oil of Gulf countries, was trading at US $ 104.21 per barrel with a rise of 1.59 percent in futures trading.
- Talking about the domestic stock market, Sensex rose 332.39 points to 75,507.09 in early trade, while Nifty was trading at 23,747.40 with a gain of 84.60 points.
- Apart from this, according to exchange data, foreign institutional investors sold shares worth Rs 1,891.21 crore on net basis on Thursday.
Will there be further improvement in the rupee?
Pabari said any supportive measures like RBI swap or positive deal flow could strengthen the rupee, while the absence of such factors could gradually push the pair towards 97.00 levels. He further said that geopolitical tensions still remain the main risk factor. He said that a sustained close below the 94.80 level would be necessary to signal a change in the broader trend in the rupee. Meanwhile, Commerce and Industry Minister Piyush Goyal on Thursday said the government is considering several measures to control the rising current account deficit (CAD) amid the weakening rupee and widening trade deficit.
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