The Indian rupee rising to 24 paise, closing at 84.33 against the US dollar on Monday is going viral everywhere. The rise was influenced by high foreign institutional investor (FII) inflows, and also a fall in crude oil, and upbeat domestic equities trend.

Why Is the Rupee Rising?

1. Foreign Institutional Investor (FII) Inflows
Overseas investors have revived interest in Indian assets, and equity inflows have amounted to Rs 2,769.81 crore. This heightened demand for Indian securities has enhanced the value of the rupee over the dollar.

2. Drop in Crude Oil Prices
Brent crude, the international oil benchmark, lost 1.26% to USD 60.52 a barrel. Declining crude oil prices lower India’s import bill, increasing the value of the rupee by enhancing the trade balance of the country.

3. Performance of Domestic Stock Market
The BSE Sensex readings increased by 294.85 points, closing at 80,796.84. And the Nifty also had a rise by 114.45 points to close at 24,461.15. A strong stock market increases investor confidence in the market. With this, results in increased demand for the rupee.

Expert Analysis
LKP Securities’ VP Research Analyst, Jateen Trivedi, said sustained FII flows and declining crude oil prices had given a shield to the rupee. The rupee can be expected to trade between 84.00 and 84.75 and will be governed by global risk sentiment and moves in commodities in terms of volatility.

Future Outlook
Although the rupee has strengthened, international factors may cap further strengthening. Market participants will carefully watch US Federal Reserve policy moves, crude oil prices, and geopolitical events to determine the rupee’s future course.

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