Robust equity inflows, totalling ₹2,769.81 crore, reflect continued foreign investor interest in Indian assets, forex traders said, adding while capital inflows offer support, global uncertainties could cap gains.
The rupee surged 24 paise to 84.33 (provisional) against the U.S. dollar on Monday (May 5, 2025), supported by a sharp decline in crude oil prices and a positive trend in domestic equities.
On [today’s date], the Indian rupee appreciated by 24 paise to close at 84.33 per U.S. dollar, marking a notable gain driven by positive domestic cues and a softening dollar index. The recovery was supported by easing crude oil prices, improved investor sentiment, and inflows into the equity market. Forex traders also attributed the strengthening of the rupee to a weaker dollar globally after U.S. economic data hinted at a possible pause in future interest rate hikes by the Federal Reserve.
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curb excessive losses, traders said.
The rupee on Tuesday logged its worst day since February 3, falling 0.57% in a single day against the dollar as expiry of the Reserve Bank of India’s positions in the non-deliverable forwards (NDF) segment increased demand for the greenback.
The Indian currency was among the worst performers among Asian currencies as it closed at 87.21/$1 against the previous close of 86.70/$1 even as intervention by the central bank helped contain excess losses, traders said.
The RBI had taken forward dollar positions in the NDF market, which expired on Tuesday, increasing dollar demand in the market, traders said.
“The currency was under pressure throughout the day as markets bought RBIs positions which expired,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors. “There was also month-end dollar demand, plus there was selling by foreign portfolio investors from Indian equities,” he said.
