Domestically, the rupee’s gains are supported by healthy capital flows, improved sentiment in local bond markets, and expectations of a stable RBI policy stance
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VIVEK PRAKASH
The upee touched a four month high on Monday on FPI related inflows into the domestic equity markets, which perked up on good corporate earnings, and a weak dollar, even as yield of the benchmark 10-year Government Security (G-Sec) softened about 5 bps to touch a 41-month low amidst surfeit of liquidity.
The rupee , which opened about 22 paise stronger, closed up 24 paise at 85.1275 per dollar against previous close of 85.3675.
Arvind Kanagasabai, Executive Vice President, Tamilnad Mercantile Bank, noted that FPI inflows into the Indian equity markets and a weak Dollar index are keeping the Rupee well supported.
Supporting factors
Abhishek Goenka Founder & CEO of India Forex Asset Management, observed that domestically, the rupee’s gains are supported by healthy capital flows , improved sentiment in local bond markets, and expectations of a stable RBI policy stance.
“Market participants await the RBI’s meeting minutes for further cues on rate trajectory and liquidity measures.
However, Trump’s erratic policies and shifts in the Fed communication could introduce extreme volatility, warranting active monitoring and risk,” he said.
Yield of the benchmark 10-year G-Sec (6.79 per cent GS 2034), which touched a low of 6.30 per cent, softened 5 basis points to close at 6.32 per cent (previous close of 6.37 per cent) on the back of ample liquidity and thawing global crude oil prices.
The last time the yield of the 10-year benchmark was at 6.30 per cent level was in November 2021, Kanagasabai.
Nuvama Wealth, in a report, said: “The 10Y benchmark (6.79 GS 2034) opened little changed at 6.37% but quickly fell in the morning session aided by strength in local currency as well as a fall in crude oil prices. Yields fell further through the day aided by optimism around better liquidity conditions – as also witnessed in continued receiving interest in the OIS segments. The 10Y point closed trade at 6.32 per cent vs 6.37 per cent previous.“
Published on April 21, 2025
