Mumbai: The Indian rupee staged a sharp rally against the US dollar on Thursday, September 3, gaining 67 paise to reach a two-month high after stronger-than-expected FCNR-B inflows boosted sentiment.
The rupee opened at Rs 94.30 against the US dollar, compared with Wednesday’s closing level of Rs 94.97. The move marked its biggest single-day gain since June.
RBI’s $127 Billion FCNR-B Boost
The rally followed the Reserve Bank of India’s disclosure that banks had mobilised $127.23 billion through Foreign Currency Non-Resident Bank, or FCNR-B deposits.
Including external commercial borrowings and overseas foreign currency borrowings, cumulative inflows reached $136.38 billion.
The mobilisation followed the RBI’s June 8 facility designed to attract foreign currency into India’s banking system and strengthen external buffers.
Inflows accelerated significantly during August. As of August 21, banks had mobilised $65.4 billion through FCNR-B deposits, before the figure surged to $127.23 billion by month-end.
Following the strong response, the RBI brought forward the closure of the FCNR-B deposit mobilisation window to August 31 from September 30.
USD-INR Levels in Focus
Currency experts see an immediate USD-INR trading range of Rs 94.10-Rs 95.50. A decisive break below Rs 94.10 could potentially push the rupee towards Rs 93.50.
The RBI’s improved foreign exchange position could also provide greater flexibility to rebuild reserves and contain excessive rupee depreciation.
However, risks remain. Brent crude trading near $95 per barrel and elevated global bond yields could pressure the Indian currency amid continuing geopolitical tensions.
