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Rupee Hits 10-Week High: FII Inflows and RBI Swaps

22 March 20251 min read
ECONOMYRupee Hits10-Week High: FIIInflows and RBISwaps22 March 2025safalsetu.com

Why in the news

The rupee climbed to a ten-week high, outdoing other Asian currencies that month.

Key facts

DriverDetail
FII flowsSteady inflows into equity and debt show confidence in India’s stability and growth
Trade and reservesStrong trade data eases current account pressure; RBI USD/INR swaps steady currency and build reserves
GlobalFed held rates and hinted at later cuts, softening the dollar
  • Rupee outperformed Asian peers during the month.
  • NSE Nifty rose for five consecutive sessions; cash market volumes up 53%.
  • RBI acted proactively, guiding the rupee to a stable, stronger zone.

Outlook

ItemLevel / factor
Support85.70
Resistance86.45
RisksReversal in FII flows; geopolitical tension
UpsideSofter dollar, robust growth data, stable oil prices

Exam angle

  • FII = Foreign Institutional Investor.
  • RBI tool used: USD/INR swap.
  • Equity index: NSE Nifty.

Test yourself

1. Which investors' inflows were seen as the strongest near-term driver of the rupee's rally to a 10-week high?

Sustained FII inflows into equities and debt were the main driver.

2. By what percentage did cash market volumes surge alongside the rupee's rally?

Cash market volumes rose 53%, signalling broad market optimism.

3. Which RBI tool was cited as stabilising currency volatility and building reserves during the rupee's surge?

RBI's active USD/INR swaps were cited.

This topic is part of Daily Current Affairs 22 March 2025 (18 topics).

All topics of the dayDay quizMarch 2025

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