The Indian Rupee rises for a second day as FCNR-B deposits and exporter dollar liquidation offset broader USD strength.
The Indian Rupee (INR) advanced against the US Dollar (USD) for the second straight session on Friday, driven by robust Foreign Currency Non-Resident Bank (FCNR-B) inflows and dollar selling by exporters. The USD/INR pair extended its decline as fixing-related dollar sales by private and foreign banks added further pressure.
Market analysts noted that aggressive dollar liquidation by exporters countered a stronger USD, while the Reserve Bank of India (RBI) intermittently absorbed excess liquidity. The rupee also found support from a sharp drop in crude oil prices after a US-Iran diplomatic breakthrough eased geopolitical tensions.
Despite the near-term boost to emerging market currencies, traders remain cautious, citing potential delays in a full recovery of global shipping and energy volumes. Fed rate hike expectations may limit further INR gains.