The Rupee briefly strengthened above the 85 to the Dollar mark for the first time this year on Friday before closing with a gain of about 20 paise over the previous close
The Rupee briefly strengthened above the 85 to the Dollar mark for the first time this year on Friday before closing with a gain of about 20 paise over the previous close, supported by a weak Dollar and declining crude oil prices.
The Indian unit opened about 38 paise stronger at 85.0475 per US Dollar (USD) against the previous close of 85.43. It briefly touched a high of 85.9675 but could not sustain these levels on importer demand. It closed at 85.2350.
Rahul Kalantri, VP Commodities, Mehta Equities, observed that the rupee gained strength against the dollar and ended the trading session at approximately 85.2350 per dollar, reflecting a 0.3 per cent weekly gain.
“The dollar index slipped to 6-month lows after the US trade tariff announcements. The dollar index has been trading on a weaker note below 102 levels amid recession worries stoked by sweeping US tariffs which dragged the dollar, thus helping the rupee rise above 85 for the first time this year.
“Led by heavy sell-off in the US equity markets, the dollar index and the US 10-year bond yields supported emerging market currencies. Crude oil prices also crashed and supported the rupee,” he said.
However, reciprocal tariff announcements by Trump on India at the rate of 26 per cent will hurt market sentiments and could limit gains of the rupee.
“We expect the rupee to remain volatile next week amid volatility in the dollar index and global financial markets and could trade in the range of 84.70- 86.80,” Kalantri said.
Forex reserves
Meanwhile, India’s forex reserves rose by a robust $6.596 billion during the week-ended March 28, 2025. As on this date, the reserves stood at $ 665.396 billion.
In the reporting week, the reserves were up as Foreign Currency Assets (FCA) and gold components rose by $6.158 billion and $519 million, respectively.
The other two components of the reserves dipped — Special Drawing Rights (down $65 million) and Reserve Position in the International Monetary Fund ($16 million).
Published on April 4, 2025
