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Rupee Recovers Amidst Dollar Strength
22 Sep
Summary
- Rupee gained 37 paise against the dollar last week.
- Foreign portfolio outflows reached $600 million in one week.
- Lower crude oil prices provided some relief to the rupee.
The Indian rupee has demonstrated a notable recovery, gaining 37 paise against the US dollar in the past week. This occurred even as the dollar index saw a slight increase. The rupee's ascent was bolstered by a decrease in US Treasury yields, which eased pressure on the local currency.
However, foreign portfolio investors (FPIs) continue to be a source of pressure, with net outflows of approximately $600 million recorded in the last week. Year-to-date, FPI outflows have surpassed $19 billion, posing a significant challenge to the rupee's stability.
Positive developments on the crude oil front offered some relief. Reports of improved shipments through the Strait of Hormuz, linked to increased Saudi Arabian exports, led to a moderation in oil prices. This easing of oil prices provided breathing room for the rupee.
Technically, the rupee showed upward momentum after hitting a two-month low last Thursday, closing at 95.59 on Tuesday. While a near-term recovery towards 95.40 is possible, broader biases remain weak due to the firm dollar and ongoing outflows.
