Mumbai: The Indian rupee made a sharp recovery against the US dollar on Wednesday, climbing up from its all-time closing low just a day earlier. It opened at Rs 88.74 and later touched Rs 87.93, its highest level in almost a month. This marks an impressive 88 paise gain from Tuesday’s close of Rs 88.81. By the end of the trading session, the rupee was around Rs 88.32, up 0.5 percent.
Why Did the Rupee Strengthen?
One of the biggest reasons behind the rupee’s comeback is the weakening of the US dollar. The dollar index, which shows the dollar’s strength against six major currencies, dropped by 0.20 percent to 98.85. This happened after US Federal Reserve Chairman Jerome Powell hinted at interest rate cuts later this year. His comments were seen as dovish, meaning the Fed is likely to take a softer approach to control inflation, which helped Asian currencies like the rupee strengthen.
RBI Steps In and Oil Prices Fall
Another important reason for the rupee’s rise is the active intervention by the Reserve Bank of India (RBI). The RBI is reported to have sold US dollars through state-run banks early in the trading day to reduce pressure on the rupee. This move gave confidence to the markets and helped support the currency.
Falling crude oil prices also played a role. Brent crude dropped by 0.37 percent to USD 62.16 per barrel, and US crude futures fell by 0.29 percent to USD 58.54. Lower oil prices are good news for India, as it reduces import costs, which helps strengthen the rupee.
Stock Market Also Helped Sentiment
Indian stock markets also performed well, with Sensex and Nifty 50 rising more than 0.5 percent. This added to the positive mood among investors, making them more confident in the Indian economy and currency.
Disclaimer: Currency markets are highly volatile and influenced by global factors. The above information is for general understanding only and should not be considered financial or investment advice.
