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USD/INR: Rupee Gains for the Week Ending March 21 on Strong Foreign Bank Dollar Inflows

Written by: Dev SethiaUpdated on: Mar 21, 2025, 4:24 PM IST
The Indian rupee rose 1% this week, making it Asia’s best-performing currency, driven by foreign inflows and strong investor sentiment despite global market trends.
USD/INR: Rupee Gains for the Week Ending March 21 on Strong Foreign Bank Dollar Inflows
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The Indian rupee extended its weekly gains on Friday, buoyed by steady dollar inflows that helped counter the decline in other Asian currencies. The rupee ended the day at ₹85.98 per U.S. dollar, marking a 0.46% appreciation and extending its weekly advance to nearly 1%.

Rupee Ends as the Best-Performing Asian Currency

With this week’s 1% appreciation, the rupee has now gained over 1.3% in March, making it the top-performing major Asian currency this month. Strong dollar sales by foreign banks, primarily driven by client flows, played a crucial role in pushing the rupee to the forefront of regional currencies.

Reversal From February’s All-Time Low

The recent strengthening marks a significant turnaround for the rupee, which had previously been under pressure due to equity outflows and hedging activities by importers.

In February, the rupee had plunged to an all-time low of ₹87.95 per U.S. dollar, but inflows from foreign banks have since helped the currency recover.

Best Weekly Performance in Two Years

The rupee is now on track for its best weekly performance in two years, largely due to foreign capital inflows and traders unwinding long-dollar positions.

Market analysts suggest that the rupee’s upward momentum is backed by a mix of strong foreign investments and strategic interventions by major financial institutions.

While the rupee gained, most Asian currencies weakened on Friday, as the U.S. dollar index edged higher.

The primary focus for currency markets remains on U.S. trade policy and economic growth trends, which continue to influence emerging market currencies.

With robust foreign bank inflows and improving investor sentiment, the rupee’s performance will be closely watched in the coming weeks.

Crude Oil 

At 4:05 PM (IST), Brent crude rose to $71.76 per barrel, recovering after a 0.33% decline in the previous session, while West Texas Intermediate (WTI) traded above $67.87.

The rise in crude prices followed the White House’s new sanctions on Iran, targeting the country’s oil minister, companies, and vessels involved in crude transport.

Additionally, the U.S. imposed restrictions on payment options for Russian energy, further impacting global oil markets.

Conclusion

The Indian rupee’s strong performance this week underscores a significant rebound from its February lows, driven by foreign bank inflows and reduced dollar demand.

With its best weekly gain in two years, the rupee remains the top-performing Asian currency this month.

Meanwhile, rising crude oil prices, influenced by U.S. sanctions on Iran and Russia, add another layer of complexity to global financial markets in the coming weeks.

 

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Mar 21, 2025, 4:24 PM IST

Dev Sethia

Dev is a content writer with over 2 years of experience at Business Today, Times of India, and Financial Express. He has also contributed stories in Hindi for BT Bazaar and Khalsa Bandhan News Paper. A journalism postgraduate from ACJ-Bloomberg, Dev enjoys spending his spare time on the cricket pitch.

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