The Rupee opened about 38 paise stronger at 85.0475 per US Dollar on Friday amid a weak Dollar and falling Brent crude prices. Liquidity surplus in the Banking system widened to over ₹2 lakh crore at the last count.
The Indian Rupee opened at the highest level in the current calendar year against the previous close of 85.43 per USD. The Indian unit is currently trading at 85.08 per USD.
Amit Pabari, MD, CR Forex Advisors, noted that among emerging Asian economies, India has emerged relatively unscathed in the tariff battle, facing a softer levy compared to rivals like China, Vietnam and Thailand.
“While major export-driven economies struggle with steeper US duties, India’s effective rate remains at 27 per cent, among the lowest after the Philippines (17per cent). This strengthens India’s competitive positioning and provides relative resilience to its currency,” he said.
The key catalysts for the rupee’s rebound are: Brent prices plunged more than 5 per cent, closing below $70 per barrel and the dollar’s broad-based weakness offered relief to emerging market currencies, including the rupee, per his assessment.
Given these factors, Pabari expects the USDINR pair to move downwards with 84.90-85.00 acting as a strong support, while 85.60 will act as a strong resistance.
Meanwhile, the liquidity surplus in the banking system widened to ₹2,16,118 crore on 3 April against ₹1,93,088. crore on 2 April. This surplus comes amid Banks building up short-term deposits in the run-up to the FY25-end and RBI conducting a series of open market operation auctions (purchase of government securities).
Published on April 4, 2025
