Indian Rupee Holds Steady Amid Dollar Sales and Market Fluctuations
PSB dollar sales help rupee close flat at 95
Image: The Economic Times
The Indian rupee closed at 94.99 per dollar on Monday, remaining stable due to dollar sales by state-run banks and fluctuating dollar demand. The currency has appreciated 2.06% from its record low in May, despite recent depreciation trends.
- 01The Indian rupee closed at 94.99 per dollar, slightly down from 95.00 previously.
- 02State-run banks' dollar sales, likely on behalf of the Reserve Bank of India, helped stabilize the rupee.
- 03The rupee has depreciated 11% in FY26 and 0.17% in FY27 so far, but has appreciated 2.06% from its record low of 96.96.
- 04MSCI inflows amounted to $800 million, while outflows reached $2 billion, impacting the rupee's performance.
- 05The Reserve Bank of India is expected to maintain the repo rate at 5.25% during its upcoming policy announcement.
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On Monday, the Indian rupee remained nearly unchanged, closing at 94.99 per dollar, compared to 95.00 the previous day. This stability was supported by dollar sales from state-run banks, likely acting on behalf of the Reserve Bank of India, and fluctuating demand for dollars for hedging purposes. The rupee traded within a narrow range, hitting a low of 95.03 during the day. Despite a depreciation of 11% in FY26 and 0.17% in FY27 thus far, the rupee has appreciated 2.06% since reaching a record low of 96.96 on May 20. Market movements were influenced by an MSCI inflow of $800 million, which shifted to outflows of $2 billion later in the day. Traders are now awaiting the US non-farm payroll data, which is crucial for the US Federal Reserve's interest rate decisions, as well as the Reserve Bank of India's upcoming monetary policy announcement, where it is widely anticipated that the repo rate will remain unchanged at 5.25%.
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The stability of the rupee affects import costs and inflation, which can influence consumer prices and economic conditions in India.
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