Indian Rupee opens 12 paise higher at 85.33/$ amid steady FII inflows

The Indian Rupee opened stronger on Monday, supported by steady foreign portfolio investment inflows into equities and a dip in oil prices, following a loss triggered by escalating border tensions.

 

The domestic currency opened 12 paise higher at 85.33 after ending at 85.45 against the greenback on Friday. With three sessions remaining in this month, the currency is on track to end April with gains of 0.20 per cent. 

 

On Friday, the Indian rupee lost momentum with tensions between India and Pakistan escalating after a ceasefire violation across the Line of Control (LoC) by Pakistan, following the Pahalgam terror attack.  

 

Meanwhile, foreign portfolio investors (FPIs) continued to buy equities for the eighth consecutive day on Friday. Global funds bought stocks worth ₹2,952.33, taking the eight-day purchase to ₹32,500 crore. FPIs have consistently bought Indian shares, selling dollars on any uptick, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, noted. Pakistan tensions have kept the rupee on the edge with uncertainty prevailing on strikes by India at Pakistan Terrorist outlets, he said. 

 

Amid the volatility, India’s underlying economic fundamentals provided crucial support for the rupee, Amit Pabari, managing director at CR Forex Advisors, said. This steady rise in reserves enhances India's import cover, providing a crucial buffer against external shocks and lending stability to the rupee, he said. "In parallel, robust equity inflows—amounting to ₹5,425.58 crore—signalled sustained investor confidence in the Indian economy, offering an additional layer of strength to the domestic currency."

 

Looking ahead, the dollar-rupee pair is expected to remain volatile, Pabari said. "Strong domestic fundamentals, such as rising forex reserves and healthy capital inflows, are likely to support the rupee... Technically, dollar-rupee has strong support between 85.00 and 85.20 levels, and it could move towards the 85.80–86.20 range." 

 

Meanwhile, the dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.19  per cent at 99.66, as of 9:15 AM IST. The ongoing global trade tension is weighing on the dollar index, keeping it anchored around the 99 level, and indirectly benefiting the rupee by curbing dollar strength, Pabari said. 

 

Crude oil prices dipped on Monday geopolitical developments in Iran weighed on sentiments. Brent crude oil was up 0.27 per cent to $67.05 per barrel, while WTI crude was up 0.35 per cent at 63.24 per barrel as of 9:20 AM IST.