Rupee Holds Two-Month High After India’s $136.38 Billion FX Inflow Program

  • The rupee settled at 94.4850 per dollar after gaining 0.5% on September 4.
  • RBI-linked special schemes attracted more than $136 billion in foreign-currency inflows.
  • Brent crude rose above $96 a barrel as renewed U.S.-Iran tensions lifted oil prices.

India’s rupee settled at 94.4850 per dollar on September 4 after rising 0.5%, extending its weekly gain to about 1% and keeping the currency near a two-month high. The rally has been supported by more forceful Reserve Bank of India dollar sales and inflows exceeding $136 billion through special mobilization schemes, including about $127 billion in non-resident deposits. Broad dollar weakness, led by a stronger Japanese yen, also aided the rupee. Rising oil prices remain a key risk: Brent crude moved above $96 a barrel amid renewed U.S.-Iran tensions, while higher energy costs, U.S. Treasury yields and expectations of a Federal Reserve rate hike could pressure the currency. The BSE Sensex rose about 0.4% to 76,889 in the related equity session, although elevated crude prices and Middle East tensions limited gains.

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