The Indian rupee recorded its biggest increase in six months after the Bank of India introduced the strongest set of market protection measures since reducing the panic in 2013. On Monday, the rupee appreciated 1%, the biggest increase since April. The USD/rupee exchange rate was 95.7575. The January dollar-rupee no-principal delivery forward fell 0.8% earlier. Bond prices fell, and the yield on the benchmark 10-year treasury bond rose 5 basis points to 7.35%, the highest level since November 2023. The Bank of India announced measures to support the local currency on Saturday after the rupee approached a historic low of 1 US dollar to 97 rupees. Measures include setting up a special window to meet the dollar requirements of state-owned oil companies and setting reserve requirements for some foreign exchange derivatives. The Bank of India raised interest rates on Wednesday and sent a signal that the policy could be tightened further. Madhavi Arora, chief economist at Emkay Global Financial Services, said, “These are tactical remedies, not structural solutions. On the face of it, the relevant measures can limit speculative positions, increase hedging costs, tighten bank liquidity, and provide some support for the rupee in the short term.”
Zhitongcaijing · 2d ago
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The Indian rupee recorded its biggest increase in six months after the Bank of India introduced the strongest set of market protection measures since reducing the panic in 2013. On Monday, the rupee appreciated 1%, the biggest increase since April. The USD/rupee exchange rate was 95.7575. The January dollar-rupee no-principal delivery forward fell 0.8% earlier. Bond prices fell, and the yield on the benchmark 10-year treasury bond rose 5 basis points to 7.35%, the highest level since November 2023. The Bank of India announced measures to support the local currency on Saturday after the rupee approached a historic low of 1 US dollar to 97 rupees. Measures include setting up a special window to meet the dollar requirements of state-owned oil companies and setting reserve requirements for some foreign exchange derivatives. The Bank of India raised interest rates on Wednesday and sent a signal that the policy could be tightened further. Madhavi Arora, chief economist at Emkay Global Financial Services, said, “These are tactical remedies, not structural solutions. On the face of it, the relevant measures can limit speculative positions, increase hedging costs, tighten bank liquidity, and provide some support for the rupee in the short term.”
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