Indian rupee holds amid dollar demand on Monday

The Indian rupee ended flat on Monday, closing at 83.5525 against the US dollar, nearly unchanged from its previous close of 83.5625, as dollar demand from local oil companies offset gains from likely portfolio inflows.

Earlier in the session, the rupee reached 83.4450, its highest since June 28. Meanwhile, the dollar index rose 0.3 per cent, surpassing the 101 mark, as Asian currencies, led by the Philippine peso’s 0.6 per cent drop, struggled.

The rupee’s recent appreciation has been fuelled by a surge in portfolio inflows and a weakening dollar following the Federal Reserve’s decision to initiate interest rate cuts last week.

Overseas investors have poured over $7.5 billion into Indian stocks and bonds so far this September, marking the highest monthly inflow of 2024.

Amit Pabari, managing director at FX advisory firm CR Forex, suggests that any upward movements in the dollar/rupee pair should be viewed as a chance to sell.

He also noted that it will be intriguing to observe the Reserve Bank of India’s actions, questioning whether the central bank will permit the rupee to appreciate or step in to curb its rise.

Attribution: Reuters

Subediting: M. S. Salama