Rupee gains 95 paise following RBI measures and lower oil prices
The Indian rupee recorded its steepest single-day rise in over six months as the central bank introduced steps to curb market speculation.
The Indian rupee appreciated 95 paise on Monday to close at 95.78 against the US dollar, marking its largest single-day increase in more than six months, according to The Indian Express. The currency's performance was supported by measures from the Reserve Bank of India (RBI) intended to manage volatility and speculation in the foreign exchange market.
The RBI previously introduced regulatory changes to strengthen market discipline, including restrictions on rebooking cancelled derivative contracts and the introduction of a Foreign Exchange Risk Reserve (FERR). Vinod Nair, Head of Research at Geojit Investments, said the rupee recovered after the central bank opened a special window for the dollar needs of oil marketing companies and tightened hedging rules.
A decline in Brent crude oil prices also aided sentiment. The Economic Times reported that oil prices retreated to $104 per barrel during Asia trading hours, falling from six-month peaks.
Despite the gains, the currency faced pressure from weaker domestic equities and ongoing outflows of foreign funds. Dilip Parmar, Senior Research Analyst at HDFC Securities, noted that the rupee was the strongest performer among its Asian peers due to the RBI's targeted actions.
On the equity markets, the BSE Sensex fell 0.76 per cent to 71,924.68, while the NSE Nifty dropped 0.70 per cent to 22,363.35 on Monday.
