MUMBAI: The Indian rupee strengthened in February to log its first monthly rise since April 2025 as a pick-up in foreign portfolio inflows and the announcement of a US trade deal eased pressure on the emerging market laggard.
The currency strengthened about 1 percent in February, recovering from a struggle near record low levels at the end of last month after the US and India announced a long-awaited trade deal.
The boost proved short-lived, though, as the US Supreme Court order to strike down President Trump’s signature global tariffs and jitters about how artificial intelligence may impact India’s IT sector rocked sentiment.
IT shares logged their worst monthly performance since September 2008.
Intermittent interventions by the Reserve Bank of India helped limit the rupee’s losses above the 91-per-dollar level this month, traders said.
On Friday, the currency ended down marginally at 90.9750 per dollar after hovering in an under-5 paisa range through the session.
Heading into March, market participants will watch out for whether the rupee’s typically positive seasonality plays out. Over the last decade, the currency has advanced an average of about 0.8 percent in March.
There could be room for the rupee to gain if the currency continues to hold above the 91-per-dollar mark, exhausting short wagers, and as dollar inflows pick up due to repatriation of foreign earnings or improvement in portfolio investment flows, a trader at a large private bank said.
Foreign investors bought more than USD2.5 billion of local stocks on a net basis in February.