The Indian rupee strengthened for the third consecutive session on Monday, rising 35 paise to settle at 95.25 against the US dollar. Forex traders attributed the gains to comments from Reserve Bank of India (RBI) Governor Sanjay Malhotra, who assured that the central bank would take necessary measures to ensure orderly price discovery in the foreign exchange market.
RBI Governor's Assurance Boosts Rupee
In a media interaction, Governor Malhotra stated that the RBI will do 'whatever is required' to maintain stability and prevent excessive volatility in the forex market. This statement provided a significant boost to investor sentiment, leading to the rupee's third straight session of gains.
Market Reaction and Trading Activity
The rupee opened stronger at 95.35 and touched an intraday high of 95.18 before closing at 95.25. The dollar index, which measures the greenback against a basket of six major currencies, was trading 0.2% lower at 104.50, providing additional support to the rupee. Meanwhile, Brent crude oil futures, a key determinant of India's import costs, edged up 0.3% to $82.50 per barrel.
Outlook for the Rupee
Analysts expect the rupee to trade in a range of 95.00 to 95.50 in the near term, with the RBI's intervention likely to cap any sharp movements. The central bank's proactive stance is seen as a key factor in stabilizing the currency amid global uncertainties, including geopolitical tensions and fluctuating commodity prices.
The rupee's recent appreciation also reflects improved foreign portfolio inflows into Indian equities and debt markets, which have been supported by the country's strong economic fundamentals. However, traders remain cautious ahead of key US economic data releases later this week, which could influence the dollar's trajectory.
