Rupee Opens 3 Paise higher at ₹85.94 against the US Dollar

The Indian rupee opened 3 paise higher at ₹85.94 against the US dollar on Monday, March 24, 2025, compared to its previous close of ₹85.97. This marks a continuation of the local currency’s strong performance over the past week, which saw it register its best weekly gain in over two years. The rupee’s appreciation has been driven by favorable domestic and global cues, along with proactive measures by the Reserve Bank of India (RBI).

Key Drivers Behind Rupee’s Movement

1. RBI’s Buy/Sell Swap Auction:
   The RBI is set to conduct a USD/INR Buy/Sell swap auction worth $10 billion today. This auction is expected to inject ₹86,000 crore of durable liquidity into the market for three years, supporting the rupee and stabilizing liquidity conditions. Currency experts suggest that traders are likely to remain cautious ahead of this auction.
2. Month-End and Quarter-End Dynamics:
   As the month-end, quarter-end, and financial year-end approach, additional demand for the dollar-rupee pair is anticipated. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, noted that the RBI might square up its positions rather than rolling them over, as seen in January and February.
3. Global and Domestic Cues:
   The rupee has benefited from easing global pressures and positive domestic developments. On Friday, it rose to a 10-week high of ₹85.9375, gaining 1.2% for the week, marking its best level since January 9 when it traded near ₹85.8638.

Recent Performance

The rupee’s rally last week was fueled by heavy intervention from the RBI to defend the currency amid earlier pressures. The central bank’s actions have helped stabilize the rupee after months of volatility caused by global economic uncertainties and domestic inflation concerns.

Market Outlook

Forex experts predict that while the rupee may face some demand pressure in the short term due to end-of-month dynamics, the liquidity provided by today’s auction will support its stability over the medium term. Traders are advised to monitor developments closely as global factors continue to influence currency movements.

Conclusion

The Indian rupee’s strong opening reflects positive sentiment in the forex market, bolstered by proactive measures from the RBI and favorable macroeconomic conditions. As traders await the outcome of today’s swap auction, all eyes remain on how liquidity injections will shape the currency’s trajectory.

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