By Jaspreet Kalra and Nimesh Vora
Mumbai, March 20 (Reuters) –
The Indian rupee on Thursday reached a height of two months and increased the dollar sales by foreign banks and promoted seasonal flows in the form of recession betting.
The rupee touched a high level of 86.2075, which is the best since January 24, appreciating 1.2% in the last seven trading sessions. The currency was last cited at 86.29, which was 0.2% a day.
Traders have held the recent rally of rupee mainly for the sale of dollars by foreign banks, possibly from their customers.
While specific flows were not identified, the march usually looks at the corporate flow related to interconnected loan and profit repatriation.
Recently, the possibility of inflows triggers ignoring the posts of ‘Structural’ long dollars/rupees in an onshore over-the-counter and non-re-liberal forward market, which further strengthened the Indian currency, said a currency merchant at a Mumbai-based bank.
This is an important reversal to the rupee, which was under constant pressure till mid -February due to equity outflow and domestic development.
The rupee has also benefited from a weak dollar, affected by the concerns of the US economic recession. The Federal Reserve on Wednesday reduced the estimates of the 2025 gross domestic product, increasing its inflation expectations.
The dollar index is currently at its lowest level this year. The concerns about US President Donald Trump’s tariff policies have assured investors about the US economy and dollars.
Fed Chair Jerome Powell said on Wednesday that uncertainty is currently “unusually elevated” by Trump’s new rapid fire policies.
He made this comment at a press conference after the Fed meeting, where the Central Bank kept the interest rates stable, as expected.
Fed policy makers estimated a two -rate deduction for the year, in line with their December forecast.
(Reporting by Jaspreet Kalra, Nimesh Vora; editing by Sonia Cheema)
