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Informist, Monday, Mar. 24, 2025

By Pratiksha

NEW DELHI – The rupee ended at a near three-month high against the dollar, gaining for the ninth consecutive trading day, as banks continuously sold the greenback for foreign fund inflows and exporters, dealers said. With an appreciation of 0.4% against the dollar, the rupee was the best performer amongst its emerging market peers on Monday. Other Asian currencies, on the contrary, declined 0.1-0.3%.  

"Exporter selling (dollars) has favoured (the rupee) significantly. It is not a surprise that the rupee is appreciating but the extent of appreciation is a bit shocking. A lot of longs (dollar bets) have unwound due to this," said a dealer at a state-owned bank. 

The Indian currency touched a high of 85.4850 a dollar during the day and settled at 85.6350 on Monday, recouping almost all of its losses in 2025. The rupee ended at 85.9725 a dollar on Friday. It has appreciated over 2.1% so far this month.

The rupee started the day slightly higher against the dollar as banks sold the greenback on behalf of exporters, who looked to convert their foreign exchange-denominated earnings into rupees before closing their books for the financial year ending March, dealers said.

"There's a lot of seasonality factor attached to the rise in the rupee. Corporates have been very active," said a dealer at a foreign bank. Noting the surge in the local unit, some exporters also sold the greenback in fear that the Indian currency may appreciate further in the coming days, supporting the Indian unit, dealers said. 

Further, foreign banks sold the greenback on behalf of foreign portfolio investors, looking to infuse funds into Indian markets, which also boosted the Indian unit, dealers said. Foreign fund inflows into Indian stocks have picked up in the last few days. Moreover, Indian bonds have received almost $3 billion in inflows in March so far. 

A surge in domestic equities also supported the Indian currency, according to dealers. The Nifty 50 closed at 23658.35 points, up 1.3%. The index hit a fresh one-month high during the day. The BSE Sensex closed at 77984.38 points, up 1.4%, after hitting a one-month high during the day.

As exporters and  FPIs stepped up their dollar sales, stop-losses were triggered on long dollar bets across multiple key dollar/rupee levels, further aggravating the rise in the local unit, they said. Noting the sharp rise in the rupee this month, traders sold dollars to trim their existing speculative positions in favour of the US unit, which also supported the Indian unit, dealers said.

"Yes, there are year-end flows but a lot of speculative and offshore positions have also unwound after the rupee's upward move. Nobody saw this much appreciation coming, which is why stop losses are happening left, right and centre," said a dealer at a big state-owned bank. 

Further, in European trade the dollar index retreated from the two-week high hit on Friday, tracking gains in the euro and pound sterling, which also aided the Indian currency, as per dealers. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 103.90, compared to 104.15 on Friday and 103.80 on Thursday. The index rose to 104.22 on Friday, its highest level since Mar. 7.

During the last leg of the trade, banks bought dollars on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, which limited gains for the Indian currency, dealers said. 

While some dealers speculated that the Reserve Bank of India may have bought the greenback at around 85.50 a dollar, in order to fill its foreign exchange reserves, others said that the central bank remained largely absent from the currency market and may have only intervened "passively". 

"The movement from 86.00 to 85.4850 was swift and one-sided with possibly RBI stepping in only at 85.48 to buy and take it higher to close at 85.6350," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP said.

FORWARDS

Premium on the one-year dollar/rupee forward contract ended lower following the RBI's $10 billion dollar/rupee buy/sell swap auction held earlier in the day, with traders expecting sharply lower-than-expected cut-off premium, dealers said. 

The central bank set a cut-off premium of 586.00 paise at the buy/sell swap auction, results released post-market hours showed. The median of an Informist poll of 12 foreign exchange dealers saw the cut-off premium at 596.00 paise. Under the buy/sell swap, the RBI has bought dollars for immediate delivery and sold them for delivery after three years.

At 1530 IST, the one-year dollar/rupee forward premium was at 2.18% on an annualised basis, against 2.19% on Friday. On an absolute basis, the premium was 186.50 paise against 188.00 paise on Friday. 

OUTLOOK

On Tuesday, the rupee will take cues from movement in the dollar index and Chinese yuan, dealers said. Market participants await the US flash purchasing managers' index data, due later in the day. They also await more clarity on  US President Donald Trump's next round of tariffs, set to take effect from Apr. 2. 

"We do, however, think that USD/INR (dollar/rupee) markets are right now underpricing the risk from Trump's reciprocal tariffs specifically for India, and think the risk-reward may be tilted towards weaker INR (rupee) from here," MUFG Bank said in a report.

The Indian unit may continue to find support in banks' dollar sales on behalf of exporters, who are looking to meet their financial-year-end payment requirements, dealers said. Further, foreign banks may also continue to sell dollars for foreign fund inflow into domestic markets, they said. 

However, dealers expect the RBI to intervene through dollar purchases if the rupee appreciates sharply. During the day, the rupee is seen moving in a range of 85.50-86.00 against the dollar. Dealers see technical resistance for the Indian unit at 85.50 a dollar.

India Rupee - World FX:Dlr index retreats from 2-wk high before US flash PMI

MUMBAI – The dollar index retreated from the two-week high it hit Friday ahead of the US flash purchasing managers' index data, due later in the day. The index hovered near its two-week high in early trade but declined during the European trade due to gains in euro and pound sterling. Investors also await more clarity on raised tariffs from Washington, as the next tranche of tariffs are set to be effective from Apr. 2. 

According to a Wall Street Journal report, the White House may omit a set of industry-specific tariffs while implementing it on countries with significant trade imbalance with the US. On Friday, US President Donald Trump hinted at a less aggressive approach toward raising tariffs, which provided some relief. "I don't change. But the word flexibility is an important word," Trump said. "Sometimes it's flexibility. So there'll be flexibility, but basically it's reciprocal."

At 1246 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 103.93, compared to 104.15 on Friday and 103.80 on Thursday. The index hit 104.22 on Friday, its highest level since Mar. 7. The Swiss franc was up 0.1%.

The euro was up 0.2% against the greenback after Germany, the bloc's largest economy, posted a rise in flash manufacturing PMI in March. Data released earlier in the day showed that the flash PMI in March climbed to 48.3 from 46.5 in February. A PMI reading below 50 indicates contraction, while a reading above that indicates expansion. Gains in the euro were limited as the eurozone composite PMI was a tad lower than expectation. It came in at 50.4 in March, slightly below the 50.7 expected by economists surveyed by the Wall Street Journal. 

The Japanese yen was down 0.2% against the dollar on Monday after Japan's flash composite PMI showed that manufacturing activities in the country fell in March due to decline in production and new orders, data released on Monday showed. The flash manufacturing PMI fell to 48.3 this month from 49.0 in February.

However, losses in the Japanese currency were limited after Bank of Japan Governor Kazuo Ueda said earlier in the day that the central bank will adjust the monetary policy if 2% inflation target is to be achieved. Further, Japan's Finance Minister Katsunobo Kato acknowledged that the country was experiencing rising price but the government could only declare vitory when it saw no chance of sliding back to deflation. 

"I believe we need to judge carefully whether Japan has broken away from deflation by not only looking at the consumer prices, but looking at underlying prices and background in a comprehensive fashion . . .  it is our judgment at present that Japan has not overcome deflation," Kato said. 

The Australian dollar was up 0.4% against the US unit after Australia's flash manufacturing PMI jumped to 52.6 in March, while services PMI rose to 51.2 for the same period, data released early on Monday showed. The New Zealand dollar traded flat against the greenback. 

The pound sterling was up 0.2% against the greenback on Monday. On Sunday, UK's Finance Minister Rachel Reeves said the country will stick to its fiscal rules despite the global turmoil. "The world has changed. We can all see that before our eyes and governments are not inactive in that," Reeves said. "We'll respond to the change and continue to meet our fiscal rules."

The Canadian dollar was up 0.2% against the greenback. On Sunday, Canada's new Prime Minister Mark Carney called for a snap election on Friday, stating a need for strong mandate to deal with threats arising form the Washington. "We are facing the most significant crisis of our lifetimes because of President Trump's unjustified trade actions and his threats to our sovereignty," Carney told.

India Rupee: Hits near 3-month high, recoups all losses incurred in 2025

MUMBAI – The rupee surged to a near three-month high against the dollar on Monday as stop-losses on long dollar bets were triggered after banks persistently sold the greenback for exporters and foreign fund inflows, dealers said. Stop-losses on long dollar bets were triggered at multiple dollar/rupee levels, they said. The rupee touched a high of 85.6075 during the day, recouping all the lossess incurred so far in 2025.

"This is usually a (financial) year-end phenomena. Exporters would want to sell dollars and keep their liabilities in rupee denominations," a dealer at a private bank said. "This kind of a rise (in rupee) was, however, unexpected."  

Banks sold dollars on behalf of exporters, who wanted to meet their financial-year end payment needs, according to dealers. Further, banks sold the greenback for foreign fund inflows into domestic equities, which also aided the local unit, they said. At 1335 IST, the benchmark indices, the Nifty 50 and the BSE Sensex, were up 1.3% and 1.4%, respectively.

"We did not expect rupee rising this much. We were expecting rupee to hold maybe 86.50 for some time, but soon each time it breached a key level, stop-losses triggered on the way and the rising tariff tensions did not really reflect on rupee levels, probably due to the weakness we saw in dollar (index) in the past weeks," a currency trader at a private bank said. The dollar index, which measures the strength of the dollar against a basket of six major currencies, has slumped over 3.3% so far this month.

The dollar index came off slightly from the two-week high hit on Friday in European trade, tracking gains in the euro. This also supported the Indian currency, dealers said. At 1335 IST, the dollar index was at 104.01, compared 104.15 on Friday and 103.80 on Thursday. The index hit a high of 104.22 on Friday, its highest since Mar. 7.

However, noting the sharp rise in the Indian unit, some banks rushed to purchase the greenback on behalf of importers, which capped gains in the rupee, dealers said. "Importers' buying (of dollars) has become active again. There is a lot of buying at this level since they are really attractive," the dealer at the private bank said.

While some dealers speculated that the Reserve Bank of India may also have purchased dollars, others said the central bank remained absent, aiding the Indian unit. For the rest of the day, the rupee is seen moving in a range of 85.50-86.00 against the dollar. Dealers see immediate technical resistance for the Indian unit at 85.50 a dollar.  (Gowri Lakshmi)

India Rupee: Premiums tad up on likely robust demand at FX swap auction

MUMBAI – Premiums on the dollar/rupee forward contracts were slightly up likely due to robust demand at the Reserve Bank of India's three-year $10 billion dollar/rupee buy/sell swap auction held earlier in the day. The auction was conducted between 1030 IST and 1130 IST.

"There is not much movement, and we all are waiting for the auction result," a dealer at a private bank said. "If you see some good tail in the result, then a heavy receiving can be seen in one-year (forward premium)." 

At 1255 IST, the one-year dollar/rupee forward premium was at 2.20% on an annualised basis, against 2.19% on Friday. On an absolute basis, the premium was 189.00 paise against 188.00 paise on Friday. After the auction, the three-year dollar/rupee forward premium traded around 595 paise, as per dealers. This is against 626.33 paise it closed on Friday.

As per the poll conducted by Informist, the cut-off at the auction was seen at 596.00 paise. While market participants were divided on where exactly the cut-off would be, some said there might be a possibility of some large corporates sweeping the auction.

The RBI conducted the auction to meet the durable liquidity needs of the system, it had said. Due to a wide deficit in the banking system liquidity, forward premiums have remained elevated, dealers said. 

A rise in the benchmark 10-year US Treasury yield weighed on premiums, dealers said. Yield on the 10-year US Treasury note rose in early European trade. After closing up one basis points on Friday at 4.25%, the yield on the 10-year US Treasury note rose further, and was near 4.29% in the early European market hours. Forwards of a currency pair are reflective of the interest rate differential between the two countries.  (Sourabh Kumar)

India Rupee: Technical Levels for rupee - Mar 24

NEW DELHI – At 1127 IST, the rupee was at 85.8450 per dollar. At 0900 IST, the rupee was at 85.9375 a dollar, against the previous close of 85.9725. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Pratiksha and Sourabh Kumar)

India Rupee: Rises as banks sell dollars for exporters, FX inflows

MUMBAI – The rupee rose against the dollar on Monday as banks sold the greenback on behalf of exporters, who wanted to meet their financial year-end payment obligations, dealers said. Some foreign banks also sold the greenback for foreign fund inflows, likely into domestic equities, which further boosted the Indian unit, they said. The rupee rose to an over 10-week high of 85.8575 a dollar in early trade. 
 

"Exporter selling (of dollar) is high today for the (financial) year-end payments. Some foreign banks also sold for inflows," a dealer at a state-owned bank said. "Rupee isn't reflecting on the recovery in dollar index probably because of this inflows." The rupee was also up tracking gains in domestic equities. At 0950 IST, the benchmark indices, the Nifty 50 and BSE Sensex, were both up 0.7%. 

However, gains in the currency were limited as the dollar index recovered and hit a high of 104.22 on Friday as investors continue to await clarity on US President Donald Trump's next round of tariffs, set to take effect from Apr. 2, dealers said. The index continued to hover near its two-week high on Monday and was at 104.16 at 0950 IST, compared to 104.15 on Friday and 103.80 on Thursday. 

Following the recovery in the dollar index, other Asian currencies fell against the greenback, which also weighed on the Indian unit, dealers said. The Chinese yuan was down 0.1% against the greenback, while other Asian currencies fell 0.1-0.4%.

Some dealers speculated that the Reserve Bank of India might have bought dollars at around 85.85 a dollar, although passively, which capped gains for the Indian currency.

During the day, the rupee is seen moving in a range of 85.80-86.20 against the dollar. Dealers see immediate technical resistance for the Indian unit at 85.80 a dollar.  (Gowri Lakshmi)

India Rupee - Asia FX: Mixed on US tariff fears; South Korean won down 0.3%

MUMBAI – Asian currencies traded on a mixed note in early trade as investors await more clarity on higher tariffs from Washington. The next tranche of hiked tariffs is set to take effect from as early as Apr. 2. Further, according to a Wall Street Journal report, the White House may omit a set of industry-specific tariffs while implementing it on countries with significant trade imbalance with the US.

On Friday US President Donald Trump hinted at a less aggressive approach toward raising tariffs, which provided some relief. "I don't change. But the word flexibility is an important word," Trump said. "Sometimes it's flexibility. So there'll be flexibility, but basically it's reciprocal."

The dollar index recovered, and touched 104.22 on Friday, the highest level since Mar. 7. The index continued to hover near the near two-week high on Monday as traders await further cues on tariffs. At 0751 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 104.07, compared to 104.15 on Friday and 103.80 on Thursday. 

The South Korean won was down 0.3% amid political uncertainty. The South Korean Constitutional Court struck down Prime Minister Han Duck-soo's impeachment. Han was impeached in late December as the acting president after he took over the then president Yoon Suk Yeol, who was impeached earlier in the same month over his imposition of a short-lived martial law. Han was impeached after he clashed with the opposition-led parliament as he refused to appoint three more judges to the Constitutional Court. The Malaysian ringgit was the worst hit, falling 0.4% against the greenback in early trade.

The Chinese yuan was down 0.1% against the greenback. On Sunday, Chinese Premier Li Qiang urged countries to open their markets to tackle increasing instability and uncertainty as Beijing braces for hiked tariffs from Washington. "In today's increasingly fragmented world with rising instability and uncertainty, it is more necessary for countries to open up their markets and enterprises... to resist risks and challenges," Li said. 

The Indonesian rupiah was down 0.3% against the greenback while the Philippines' peso traded flat against the greenback. The Taiwan dollar traded 0.1% lower against the US currency. The Thai baht was up 0.1% against the greenback after the data published Sunday showed that Thai exports jumped 14% on year in February, significantly above the analyst forecast of 9.7% rise in a Reuters poll. In January, Thai exports had risen 13.6%. (Gowri Lakshmi)

India Rupee: Expected range for rupee - Mar 24

MUMBAI – Following are the expected support and resistance levels for the rupee on Monday, as forecast by leading banks and brokerages in an Informist poll:

(Sourabh Kumar and Pratiksha)

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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