The weakening of the dollar and selling of dollars from public sector banks by the Reserve Bank of India recorded the biggest one -day lead since February 11. Dealers gave this information. On Wednesday, the local currency gained 0.36 per cent to close at 86.96 per dollar while the previous closed level was 87.27 per dollar. In this financial year, the rupee has fallen by 4.09 per cent so far, while it has devalled 1.55 per cent in this calendar year.
A government bank dealer said, the rupee was strengthened because the dollar was dropped in the index in the morning and the global signals also led to the rise in Asian currencies. He said, we feel that the rupee will trade with firmly from here, but in the long period we see it trading at 88 to 89 per dollar. This may be due to rates in April.
The dollar index fell 0.6 per cent to 104.9 amidst the concerns of the US growth landscape and the uncertainty of the impact of trade charges on inflation, which is the lowest level after November 2024. This index suggests the dollar strength against the basket of six major currencies.
The US has imposed a 25 per cent duty on imports from Mexico and Canada, while the duty on imports from China has been doubled to 20 per cent. In addition, President Donald Trump has announced that counter -duty charges will also be implemented on India, which will be effective from April 2.
A government bank dealer said, the announcement on the fees should have gone in the opposite direction, as the instability was very high. But the discussion of removing the fee on Canada strengthened the rupee and other Asian currencies. So there will be not much certainty about the trump fee.
On the other hand, pure cash in the banking system improved on Tuesday and now it was reduced by Rs 20,416 crore while on Monday there was a shortage of Rs 1.09 lakh crore. Experts said that cash has improved due to RBI’s $ 10 billion dollars and sales swaps on Friday.
Gaura Sen Gupta, the chief economist at IDFC First Bank, said, the cash has improved as the system will have a liquidity of the rupee, but the withdrawal of tax payment is also to be done.
First Published – March 5, 2025 | 10:58 PM IST