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Rupee Posts Best Week Since April on Bond Inflows, Oil Slide
The rupee rose 0.83% for the week, its best since April, driven by RBI measures, bond inflows, and lower oil. Analysts see bias shifting toward 93.50.
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The rupee ended Friday little changed at 94.32 per dollar. It climbed to 94.21 early in the session on unwinding of long dollar positions. It gave back those gains later; the dollar strengthened and index-rebalancing outflows hit the currency. For the week, the rupee rose 0.83%, its best performance since the week ended April 3. That marks the fourth weekly gain in five weeks.
The move was driven by a combination of factors. The Reserve Bank of India announced dollar-attracting measures two weeks ago, including absorbing hedging costs to attract foreign currency deposits and a concessional FX facility to support external borrowing. Those steps, along with strong foreign inflows into Indian government securities and a slide in oil prices, supported the rupee.
The de-escalation of Middle East concerns also helped. Brent crude had fallen sharply in recent weeks, reducing India's import bill. Oil prices stayed low through most of the week.