Rupee vs Dollar / Rupee compensated for the loss, now it will be hard to believe what you will see

Rupee vs Dollar: The Indian rupee closed strongly for the seventh consecutive day and closed at 85.67 (provisional) against the US dollar on Monday, up 31 paise. The special thing is that the rupee has completely recovered all the losses suffered in the beginning of the year 2025. Factors such as positive trend in domestic equity markets, fresh foreign capital inflows and fall in crude oil prices are behind this surge. The weakness of the dollar has also contributed to this rise. However, risks such as lack of liquidity and reciprocal tariffs still remain a challenge for the rupee.

Possibility of further rise in rupee

Experts believe that the rupee may see a further rise of up to 47 paise in the coming days. Some analysts even say that the rupee can break the level of 85 and reach 84.

Currency market data on Monday

The rupee opened at 85.93 in the interbank foreign currency exchange market and after touching a high of 85.49 and a low of 86.01 during the day's trading, finally closed at 85.67. On the previous trading day i.e. Friday, the rupee closed at 85.98, up 38 paise against the US dollar. The rupee has registered a total gain of 154 paise for the seventh consecutive session. On December 31, 2024, the rupee closed at 85.64.

What is the reason behind the rise?

According to Dilip Parmar, Research Analyst, HDFC Securities, the Indian rupee has recouped its annual loss. Dollar sales by foreign banks and exporters, buying by foreign funds in the domestic equity market and a decline in purchases under the USD/INR swap by the RBI supported the rupee. In addition, the visit of the US representative to India ahead of the proposed reciprocal tariff implementation on April 2 is also creating positive sentiments. In the near term, USD/INR may remain between the support level of 85.20 and the resistance level of 86.05.

Tremendous rise in the stock market

Meanwhile, the dollar index was trading 0.09 percent lower at 103.99, while Brent crude futures rose 0.54 percent to $ 72.55 per barrel. The Indian stock market also witnessed a tremendous rise, where the BSE Sensex closed at 77,984.38 points with a gain of 1,078.87 points or 1.40 percent. At the same time, the Nifty closed at 23,658.35 points, up 307.95 points or 1.32 percent.

Foreign investors' massive buying

According to exchange data, foreign institutional investors (FIIs) bought shares worth Rs 7,470.36 crore on a net basis on Friday. Apart from this, according to the Reserve Bank of India (RBI), the country's foreign exchange reserves increased by US$ 305 million to US$ 654.271 billion during the week ended March 14. In the previous week, the total reserves had increased by US$ 15.267 billion to US$ 653.966 billion, the fastest weekly increase in two years.

Further prospects

Given the recent strength in the rupee, investors and analysts are keeping an eye on how long this rally will continue. Apart from global factors, the recovery in the Indian economy and investment inflows will affect the value of the rupee. If foreign capital inflows continue in this manner and crude oil prices remain low, the rupee may strengthen further.