Dollar vs Rupee News / Rupee beats dollar, takes biggest jump in two years

Dollar vs Rupee News: The battle between the Indian currency rupee and the US dollar reached a new turn on Tuesday. There is an old saying, '100 goldsmiths and one blacksmith', and the Indian rupee proved this saying true. For the past few months, the value of the rupee was continuously falling against the dollar, which also harmed the Indian economy to some extent. But on Tuesday, the rupee strengthened in one stroke and managed to give the biggest blow to the dollar in two years. This strength was the result of the intervention of the Reserve Bank of India (RBI) and global financial factors.

Rupee's longest jump

The intervention by the RBI amid fears of a trade war gave tremendous support to the rupee, making it stronger by 61 paise to reach 86.84 against the dollar. During the trading session, the rupee saw a rise of about 1%, which is believed to be its biggest jump since November 2022. In the early session of the day, it reached 86.69, although later it retreated slightly to 86.6362 per dollar. This rise shows that the Indian currency is now regaining its strength and playing an important role in the global financial scenario.

Rupee emerged as Asia's big force

India, Asia's third largest economy, was successful in keeping its currency strong against the dollar. The special thing was that China's Yuan and Japan's Yen, which usually perform strong, were seen lagging against the dollar this time. Reserve Bank of India (RBI) Governor Sanjay Malhotra had recently said that the rupee has not fallen excessively against the dollar, but the dollar has strengthened more. In this context, the recent strength of the rupee indicates that the Indian economy is effectively facing the shocks of the dollar.

RBI's intervention and impact

The Reserve Bank of India played an important role in this strengthening of the rupee. According to market sources, the RBI sold dollars through public sector banks on Monday, providing the necessary support to the rupee. This intervention became even more significant when the trend continued even after the market opened. Traders believe that this unexpected move was taken to keep the market in balance.

The RBI not only sold dollars in the spot market, but also carried out dollar-rupee buy/sell swaps for liquidity management. This ensured that the strength of the Indian currency remained sustainable and the market remained balanced.

Dollar index and global impact

The dollar index was flat at 108.3 on Tuesday, while other Asian currencies declined between 0.1% and 0.7%. Investor sentiment towards the dollar changed after US President Donald Trump's decision to impose a 25% tariff on all steel and aluminum imports. The move provided some support to the US currency, but the Indian rupee withstood it well.

The way forward

Even though the Indian rupee is currently standing strong, the way forward remains challenging due to global economic uncertainties. RBI and other financial institutions will have to remain vigilant to keep the rupee stable. According to a report by Kotak Mahindra Bank, the rupee may remain under pressure in the near future, but at present it remains at a fair value level.

Conclusion

The jump that the Indian rupee made on Tuesday shows that strong economic policies and precise interventions can compete in the global currency market. This is a sign of India's financial stability and economic soundness. If such efforts continue in the future, the Indian currency will be ready to play an important role in the global financial system.