InvestorQ : What explains the sharp bounce in the Indian rupee?
Moii Chavate made post

What explains the sharp bounce in the Indian rupee?

Tisha Malhotra answered.
1 week ago

The rupee has suddenly showed a log of strength in the last couple of days. After crossing the Rs80/$ mark on a couple of occasions last week, the rupee suddenly rallied sharply gaining 1.50 paisa to close at 78.49/$. There were several reasons for the rupee strength like the fall in oil prices, the relative reduced hawkishness of the Fed, the dollar weakness and the persistent FPI inflows into Indian equities after 9 months of selling.

There were technical factors too. Most exporters were planning to offload their dollars in the range of 80-81/$, but rushed for cover after the rupee started appreciating. This rush for converting the dollars into rupees also put technical pressure on the dollar and propperd up the rupee. That was one of the keyfactors that led to the sharp rally in the Indian rupee on Tuesday. To an extent, the robust government coffers full fo spectrum fees also helped matters.