Indian rupee hits 10-week closing high as RBI schemes draw hefty dollar inflows
MUMBAI: The Indian rupee notched a 10-week closing high on Thursday, buoyed by stronger-than-expected dollar inflows under the central bank’s special scheme, even as importer demand pared some of the currency’s earlier gains. The Indian rupee closed 0.5% higher at 94.4850 per U.S. dollar, its highest level since June 25. The currency also posted its biggest daily gain since July 27. The rupee opened at 94.30 per dollar but trimmed gains to 94.49 during the session as importer demand picked up. Sentiment was boosted after the Reserve Bank of India’s special measures drew far more inflows than economists had expected, reinforcing views that the central bank could aggressively use its recently acquired firepower to manage the rupee. “Higher-than-expected inflows will materially strengthen the RBI’s hand. With the RBI’s forward short position already around $137 billion, the strategy is likely to shift from simply defending the rupee against depreciation towards active two-way management,” said Kunal Sodhani, head of treasury at Shinhan Bank. “The RBI can continue selling dollars on sharp USD/INR rallies, but use the abundant dollar supply to absorb dollars on deeper dips, rebuild rese
Indian rupee hits 10-week closing high as RBI schemes draw hefty dollar inflows
MUMBAI: The Indian rupee notched a 10-week closing high on Thursday, buoyed by stronger-than-expected dollar inflows under the central bank’s special scheme, even as importer demand pared some of the currency’s earlier gains. The Indian rupee closed 0.5% higher at 94.4850 per U.S. dollar, its highest level since June 25. The currency also posted its biggest daily gain since July 27. The rupee opened at 94.30 per dollar but trimmed gains to 94.49 during the session as importer demand picked up. Sentiment was boosted after the Reserve Bank of India’s special measures drew far more inflows than economists had expected, reinforcing views that the central bank could aggressively use its recently acquired firepower to manage the rupee. “Higher-than-expected inflows will materially strengthen the RBI’s hand. With the RBI’s forward short position already around $137 billion, the strategy is likely to shift from simply defending the rupee against depreciation towards active two-way management,” said Kunal Sodhani, head of treasury at Shinhan Bank. “The RBI can continue selling dollars on sharp USD/INR rallies, but use the abundant dollar supply to absorb dollars on deeper dips, rebuild rese
