Rupee Strengthens By 47 Paise To 91.51 Per Dollar On RBI Support

Mumbai: The Indian rupee on Monday posted a sharp rebound closing stronger by 47 paise at 91.51 against the dollar boosted by likely dollar sales by the central bank and dollar inflows from Shriram Finance stake sale. Japan’s Mitsubishi UFJ Financial Group (MUFG) is acquiring around a 20 per cent stake in Shriram Finance in a deal valued at $4.3 billion.

Traders said that the RBI protected the rupee from moving beyond 92 levels and with the Shriram Finance stake sale amount coming in, the dollar was sold off till 91.4325.

At the interbank foreign exchange market, the rupee opened at 91.76 to a dollar. It made an intraday high of 91.43 and a low of 91.83. It finally ended at 91.51 compared to its previous close of 91.98 to a dollar.

"While the total inflow from the stake sale is around $4.3-4.4 billion, part of it may have come in which along with the RBI selling dollars was good enough for the rupee rebound today. There was good dollar buying as rupee initially headed towards 91.8325 before RBI took over control and ensured that the level was highest for the day as rupee rose to 91.4325 before closing at 91.5125," said Anil Bhansali, head treasury at Finrex Trading Advisors.

The one month premiums fell to 2.04 per cent while the one year premiums were slightly higher at 2.61 per cent.

"The rupee will remain in the range of 91.20 to 92.00 tomorrow when the spillover of today’s inflows could be seen as the entire amount could be divided into 2 or more parts," added Bhansali.

The Union Budget on Sunday announced a record government borrowing of Rs 17.2 lakh crore for FY27, higher than market expectations. As a result, bond yields moved higher at 6.77 per cent, from 6.70 per cent a day earlier. However, the RBI's mid tenor dollar-rupee buy-sell swap operations helped cushion rupee liquidity and prevented spillover stress into the forex market.