Mumbai: The Indian rupee strengthened 21 paise on Monday to close at 95.16 against the US dollar, supported by equity index-related inflows on the last trading day of the month.
The unexpected inflows triggered stop-losses among some traders, accelerating the currency’s gains.
In Tuesday’s intraday trade, the rupee rose 0.3% to 94.87 per dollar after opening near 95, briefly moving into the 94 range. Traders attributed the move partly to a likely Reserve Bank of India dollar sale before the local spot market opened.
The rupee’s strength followed stronger-than-expected first-quarter GDP growth of 7.8%, along with MSCI-related inflows, contained fiscal slippage and continued RBI support.
Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors, said robust domestic growth and portfolio inflows helped offset pressure from higher oil prices and a stronger dollar.
The dollar index rose 0.07% to 99.47 but remained down 0.54% over the past month. Domestic equities also traded higher, with the Sensex up 0.27% and the Nifty gaining 0.15%.
Foreign portfolio investors remained net buyers for a second consecutive month, purchasing Rs 29,631 crore in August after Rs 20,200 crore in July.
However, they remain net sellers in 2026, withdrawing Rs 2.24 lakh crore so far, exceeding last year’s Rs 1.66 lakh crore outflow.
