USD/INR pair falls to 95.62 after US Treasury announces plans to double bond-buyback operations to $4 billion per operation.
The Indian Rupee (INR) rebounded against the US Dollar (USD) on Thursday, halting a three-day decline. The USD/INR pair retreated to near 95.62 as long-dated US Treasury yields plunged following the Treasury Department’s announcement to expand bond-buying operations.
30-year US Treasury yields dropped nearly 2% from Tuesday’s close to 5.18%, while 10-year yields held near 4.64%. The US Dollar Index (DXY) weakened to a seven-week low of 98.77, reducing demand for the Greenback and boosting riskier currencies like the INR.
The Treasury Department will increase its liquidity-support buyback operations for longer-dated securities from $2 billion to at least $4 billion per operation. The move aims to stabilize borrowing costs amid rising inflation concerns, as Fed minutes revealed support for potential rate hikes if inflation persists.