Rupee Hits Near 1-Year High, Here’s What Experts Say

The rupee has hit a near 1-year high, as solid robust inflows from Foreign Portfolio Investors has kept the currency strong.

Nish Bhatt, Founder & CEO, Millwood Kane International - an investment consulting firm on Rupee says, "The Indian rupee has appreciated, it is trading near the psychological level of 72.50/$, almost a 1-year high level for the rupee. The appreciation in the rupee is primarily due to RBI intervention, positive comments by rating agency Moody's on India's economic outlook, record fund flows in Indian equities by FIIs.

The rally in crude prices, a hope of an extra stimulus package from the US government, and the policy stance of the US Fed to keep rates low for a longer duration of time has kept the Dollar lower. Moving forward RBI's action via OMO to support the rupee, global economic recovery, and vaccination process will guide the INR/USD movement."

Rahul Gupta, Head Of Research-Currency, Emkay Global Financial Services, says: "Across the globe, equities are charged on 'risk-on' tone as countries and regions are rolling out vaccines and easing lockdown restrictions. This optimism has pushed Indian rupee to surge to 72.57, highest level since Mar 3, 2020. The trading range has shifted to 72.00-73 and RBI seems to be comfortable with rupee appreciating below 73 level. This week is a holiday thinned market so fx trading may be uninspiring but RBI intervention will be eyed. The focus will remain on global flash PMIs and Fed minutes and until then 72.50 will act as a strong support in USDINR spot, a break of which can push the spot price towards 72 zone, while 73 will act as an immediate resistance."