The Indian rupee hit its highest point in about a month on Tuesday, with support from India’s central bank in the foreign exchange market and continued foreign investment inflows.
The rupee traded around 95.01 per US Dollar in early trading compared with 95.16 the previous day, as traders said the Reserve Bank of India sold dollars prior to the opening of local markets. The intervention pushed the rupee toward the key 95-per-dollar level, Reuters reported.
The rupee rose 0.2% on Monday, ending at 95.1625 per dollar, its best since Aug. 5. The currency has registered a small gain in August after a decline in July.
The Reserve Bank of India has “increasingly been intervening to cushion the rupee … due to support from improved forex reserves and increased foreign currency inflows,” the financial news service Bloomberg reported, adding that New Delhi has tried to ward off pressure caused by higher oil prices and shifts in interest rate expectations abroad.
Foreign portfolio investors placed about $3.1 billion into Indian stocks in August, the highest monthly influx in two years, Reuters reported. Such inflows, along with the RBI’s actions, have done much to quell worries about the rupee’s volatility.
