Indian Rupee marks best week in 19 months

The Indian Rupee made a significant comeback to mark its best week in 19 months after falling to a record low. The currency was lifted by the central bank's heavy intervention in the foreign exchange market and kept speculators betting against the currency at bay.

TheRupeeclosed out the week 0.1 per cent higher at 86.82 against the dollar. For the week, it gained 0.7 per cent, the most since mid-July of 2023. This comes after the currency fell to a new all-time low of 87.95 on Monday.

Slowing economic growth in India, the Reserve Bank of India’s (RBI) rate cut last week, foreign investor exodus from domestic stocks, and fears of a global trade war in response to Trump's tariff measures have put pressure on theRupee.

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Rupeerecovers sharply from record low

After the currency fell to a new life low, the RBI sold dollars in the foreign exchange market on Monday, limiting theRupee's decline.

The central bank reportedly intervened significantly again on Tuesday. TheRupeeis expected to trade within the 86.60 to 87.20 range in the near term. The RBI burning through its forex reserves has raised some concerns.

However, analysts gave a thumbs up to the central bank for intervening to stabilise the currency. Broad expectations were that the rbi would start limiting its intervention and start building on the forex reserves.

The latest data shows India’s import cover risen for the third consecutive week after having fallen for four months. Before the current positive run, the country's forex reserves had fallen in 15 of the 16 weeks, hitting an about 11-month low.

India's import cover has fallen about 65 billion dollars since hitting a record high of about 705 billion dollars in September. Currently, India’s forex war chest is sufficient to cover about 11 months of projected imports.

(With inputs from the agencies)