Indian rupee on March 28 logged the best month in terms of appreciation in over six years mostly due to consistent inflows into equities and debt by the foreign investors.
The local currency was trading over three months high today at 85.4512 against the US dollar, which was highest since December 26, 2024, when it was trading at 85.2650 against the US Dollar.
According to the Bloomberg data, Indian rupee so far this month has appreciated around 2.36 percent, which is highest appreciation since November 30, 2018, when it had appreciated around 5.91 percent in a month.
The appreciation came after it remained under pressure for the few months since last year, which led to heavy intervention by the Reserve Bank of India (RBI) to defend it.
Amit Pabari, managing director at CR Forex Advisors said that robust domestic equity performance and sustained foreign fund inflows could provide a stabilizing effect.
“Over the past four days alone, foreign investors have pumped over $2 billion into Indian equities, while month-to-date inflows into Indian bonds have exceeded $3 billion,” Pabari added.
Foreign investors investment in debt segment turned positive in March, with total investment of around Rs 35,000 crore, which includes debt general limit and debt FAR. Similarly, in the equities, for around seven sessions foreign investors poured in Rs 33,000 crore.
Experts also said that in March, the local currency also got comfort from the retail inflation which fell below the RBI’s medium term target of 4 percent.
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