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On Thursday, the Indian rupee strengthened sharply against the US dollar, gaining 67 paise to reach a two-month high.
The rise marked its strongest single-day advance since June, supported by unexpectedly strong foreign currency inflows through the RBI’s FCNR(B) facility.
The rupee opened at Rs 94.30 against the dollar, compared with Wednesday’s close of Rs 94.97.
The RBI said it had attracted $127.23 billion through FCNR(B) deposits.
Including external commercial borrowings and overseas foreign currency borrowings, total mobilisation reached $136.38 billion.
The inflows followed the RBI’s June 8 initiative to bring more foreign currency into India’s banking system and strengthen external buffers.
Mobilisation increased significantly in August, with banks raising $65.4 billion through FCNR(B) deposits by August 21.
The strong response prompted the RBI to bring forward the closure of the FCNR(B) deposit mobilisation window to August 31 from September 30.
The swap facility for eligible deposits already mobilised will, however, remain available until September 11.
Currency analysts expect the rupee to trade in the Rs 94.10-Rs 95.50 range in the near term. A sustained move below Rs 94.10 could take the currency towards Rs 93.50.
Experts said the RBI’s stronger foreign exchange position could help rebuild reserves and contain excessive rupee weakness.
Elevated Brent crude prices and higher global bond yields remain key risks.
Brent crude was trading close to $95 a barrel as geopolitical tensions continued.
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