MUMBAI: The Indian rupee’s sharp run-up over March due to a pickup in inflows and an easing bearish bias helped the local unit recover from a record low hit last month and trim its losses for the fiscal year.
The rupee closed at 85.47 per US dollar, gaining 0.3% for the day and 2.3% in March.
That helped it pull away from its all-time low of 87.95 on February 10 and cut its losses to 2.4% for the financial year ending March 31.
The exodus of foreign money from Indian stocks and a spell of dollar strength had kept the rupee under pressure. However, the reversal of those factors recently helped the rupee claw back some losses.
The local currency also found support from seasonal inflows on account of repatriation of corporate dollar-based earnings, traders said.
The fiscal year’s final quarter also marked a shift for the rupee as two-way volatility picked up, with traders and analysts pointing to a likely change in the central bank’s currency intervention strategies, notably since Sanjay Malhotra took over as governor in December.
“A two-way price action could become more common under the new regime, a shift from the prolonged period of low volatility seen previously,” said Abhishek Goenka, chief executive at FX advisory firm IFA Global.
Comments
Comments are closed for this article.