Indian Rupee Surges for Seventh Day, Closing at 85.67
The Indian rupee has continued its impressive rally, gaining 31 paise to close at 85.67 against the US dollar on Monday. This marks the seventh consecutive day of appreciation, effectively erasing all losses the currency experienced in 2025. The rupee’s rise is attributed to positive domestic equity trends, fresh foreign investments, and a weakening US dollar.
Factors Driving the Rupee’s Rise
The rupee opened at 85.93 and fluctuated throughout the day, reaching a high of 85.49 and a low of 86.01 before settling at 85.67. This latest gain follows a 38 paise increase on Friday, showcasing a total appreciation of 154 paise over the past week. Analysts highlight that the rupee’s recovery is largely due to foreign banks and exporters selling dollars ahead of the financial year-end, while state-run banks have remained inactive in the market.
Dilip Parmar, a research analyst at HDFC Securities, noted that the positive sentiment surrounding an upcoming visit from a US representative to India has also bolstered the rupee. Additionally, foreign institutional investors (FIIs) have been actively buying in the domestic equity markets, further supporting the currency’s upward trajectory.
Market Performance and Investor Sentiment
The Indian equity markets have mirrored the rupee’s positive performance. The BSE Sensex surged by 1.40%, gaining 1,078.87 points to close at 77,984.38, while the Nifty index rose by 1.32%, increasing by 307.95 points to reach 23,658.35. This surge in the stock market has been fueled by significant foreign investment, with FIIs purchasing equities worth Rs 7,470.36 crore on a net basis last Friday. The overall market sentiment has improved as selling pressure from foreign portfolio investors (FPIs) has eased. Last week, outflows narrowed to Rs 1,794 crore (approximately USD 194 million), reflecting growing optimism amid easing global concerns and potential de-escalation in the Russia-Ukraine conflict.
Future Outlook for the Rupee
Looking ahead, analysts suggest that the USD/INR spot rate is expected to find support at 85.20 and face resistance at 86.05. The dollar index, which measures the strength of the US dollar against six major currencies, was down by 0.09% at 103.99. Meanwhile, Brent crude oil prices rose by 0.54% to USD 72.55 per barrel, which could also influence currency dynamics. India’s foreign exchange reserves have seen a boost, increasing by USD 305 million to reach USD 654.271 billion for the week ending March 14, according to the Reserve Bank of India. This increase in reserves, coupled with a favorable market environment, suggests a stable outlook for the rupee in the near term.
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