Rupee rises 62 paise after fresh measures by India’s central bank

what happened

The Indian rupee extended its advance on October 13, opening at 95.16 per US dollar, up 62 paise from Monday’s close of 95.78. Moneycontrol.com reported that the move followed additional measures by the Reserve Bank of India aimed at easing pressure on the currency.

Finrex said market participants had become cautious about buying dollars after the central bank’s actions. The rupee’s close at a one-month high gave smaller importers some relief when purchasing dollars for payables, while larger importers had to pay banks extra in FERR to hedge their positions.

Finrex had expected the rupee to open near 95.51 and said the RBI was temporarily ensuring that it did not weaken beyond 96. The currency was expected to trade between 95 and 96 during the day, with exporters selling into gains and importers continuing to buy dips while hedging October and November import payments.

Most Asian currencies weakened against the dollar. The South Korean won fell 0.214%, the Taiwan dollar declined 0.175%, the Philippine peso lost 0.129% and the Indonesian rupiah dropped 0.078%. The Japanese yen gained 0.152%, while the Singapore dollar was unchanged. The dollar index stood at 102.56 after rising 0.3% on Monday.

why it matters

The rupee was being shaped by RBI measures, importer and exporter flows, and broader dollar demand. The dollar index remained near its highest level since April last year, while geopolitical risks increased after renewed attacks on energy infrastructure in the Middle East and Ukraine.

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