The Indian rupee opened 3 paise higher at ₹94.46 against the US dollar on Friday, 4 September, supported by dollar sales by the Reserve Bank of India (RBI) and strong inflows from one-off measures. However, rising crude oil prices remain a key challenge for the currency, Reuters reported.
The rupee has emerged as Asia’s second-best performing currency after the Korean won this week, reaching a two-month high despite a sharp rise in oil prices. Higher crude prices have pushed up US Treasury yields and strengthened expectations that the US Federal Reserve could raise interest rates this month.
The currency has also gained support from more aggressive RBI intervention. This was further reinforced on Thursday, when the central bank provided an update on inflows generated by its special schemes.
According to Reuters, inflows linked to these schemes have crossed $136 billion, significantly exceeding market expectations and providing a strong boost to the rupee.
A currency trader at a bank told Reuters that the combination of substantial inflows and the RBI’s increased willingness to deploy its larger reserves more actively could alter near-term expectations for the rupee’s trajectory.
