RBI's intervention and fall in crude oil prices, has the rupee faced a major crisis returned?
At the end of Friday's trading session, the rupee was at 95.73 (provisional), up 63 paise from its previous close. On Thursday, the rupee improved 50 paise from its all-time low and closed at 96.36 against the US dollar. This means the rupee has gained 113 paise, or ₹1.13, in two consecutive days.
The rupee has gained for the second consecutive day. Significantly, it has gained 50 paise or more for the second consecutive day. Data shows that the rupee has gained more than 1 rupee against the dollar in two consecutive days.
It's rare to see such a significant increase for two consecutive days. Experts believe the rupee's rise is due to the RBI's intervention in the currency market and the decline in crude oil prices. The rupee also appears to be benefiting from the dollar's sluggishness.
the rupee could see further appreciation in the coming days. Experts believe that if the current situation persists, the rupee could even reach the 94 level against the dollar in the coming days.
Now the biggest question is: has the major crisis of the rupee reaching the 97 level been averted? Could the rupee see a rise in the coming days? Is the rupee's rise against the dollar a short-term one? Let's try to answer these questions by looking at currency market data.
Rupee gains sharply
The rupee strengthened for the second consecutive session on Friday, closing at 95.73 (provisional) against the US dollar on softening crude oil prices and alleged Reserve Bank intervention.
Forex traders said markets got some relief when comments by US Secretary of State Marco Rubio indicated that diplomatic talks on the Iran situation were moving in a constructive direction. Additionally, a rise in domestic equities and a decline in US Treasury yields also supported the rupee.
In the interbank foreign currency exchange market, the rupee opened at 96.30 against the US dollar, then touched an intraday high of 95.30 and a low of 95.68 against the US dollar in intraday trade.
At the end of the trading session on Friday, the rupee was at 95.73 (provisional), up 63 paise from its previous close.
On Thursday, the rupee improved 50 paise from its all-time low and closed at 96.36 against the US dollar. This means that the rupee has gained 113 paise, or Rs 1.13, in two consecutive days.
What are experts saying about this rise?
Anuj Chaudhary, Research Analyst at Mirae Asset Sharekhan, said, "We expect the rupee to trade with a negative bias due to uncertainty between the US and Iran, which could put pressure on the rupee.