The Indian rupee has showcased a strong performance against the US dollar, closing with significant gains. Market experts suggest that further recovery is possible, and if the trend continues, the rupee may strengthen by more than 80 paise against the dollar. This surge is attributed to the reduced impact of the US tariff war on India and the decline in the dollar index.
On February 10, the rupee had hit an all-time low against the dollar. However, a remarkable 1.54% recovery has been observed since then. If the rupee gains another 80 to 85 paise, the overall recovery will reach around 2.50%, marking a significant gain. Let’s take a closer look at the rupee’s current level against the dollar.
Rupee Closes Higher
In the Interbank Foreign Currency Exchange Market, the rupee ended at 86.65 per dollar (provisional), gaining 33 paise against the US dollar. This rise was primarily due to the weakening of the dollar in global markets. Foreign exchange traders highlighted a negative trend in the dollar/rupee exchange rate, influenced by a softening domestic stock market and continuous foreign capital outflows.
The rupee opened at 86.88 per dollar and fluctuated between 86.58 and 86.88 before settling at 86.65 per dollar. This represents a 33 paise increase from the previous close. On Tuesday, the rupee had closed 10 paise lower at 86.98 per dollar.
Strong Growth in the Last 10 Days
Over the past 10 days, the rupee has witnessed a notable recovery. On February 10, it had hit a record low of 87.94 per dollar. Since then, it has strengthened by 1.54%. Experts predict that this upward trend may continue, supported by declining crude oil prices and the reduced impact of US tariffs on India. Additionally, the dollar index has been falling in global markets, further supporting the rupee’s growth.
Further Strengthening Expected
Market analysts anticipate further strengthening of the rupee. Dilip Parmar, research analyst at HDFC Securities, stated that after trading in a narrow range for five days, the rupee has gained due to foreign bank dollar sales. Similarly, Amit Pabari, MD of CR Forex Advisors, noted that the rupee could appreciate further, with the dollar/rupee pair expected to fluctuate between 86.60-87.20. While 87.20 remains a strong resistance level, 86.50 serves as key support. If the rupee falls below 86.50, it may strengthen further to 85.80-86 per dollar.
Declining Dollar Index
The dollar index is experiencing a decline. Recent data shows the index trading at 106.95, down 0.21%. Over the past five trading sessions, it has fallen 0.31%, and in three months, it has dropped by nearly 1%. Since the beginning of the year, the index has decreased by 1.38%. Meanwhile, global Brent crude oil prices have risen 0.04% to $76.07 per barrel.
Stock Market Performance
In the domestic stock market, the BSE Sensex fell 203.22 points, closing at 75,735.96, while the Nifty dropped 26.15 points to 22,906.75. According to market data, Foreign Institutional Investors (FIIs) sold stocks worth ₹1,881.30 crore on a net basis on Wednesday.