Indian Rupee hovers near multi-month highs as foreign inflows support Indian equities
USD/INR continues its losing streak for the eighth successive day, trading around 93.80 during early European hours on Monday. The currency pair is hovering near seven-month lows as the Indian Rupee (INR) gains strong support from massive foreign capital inflows.
The Indian Rupee (INR) has been near its highest level in several months as foreign investments bolster its strength. Overseas investors poured in over $4.1 billion into Indian equities during November, marking their biggest monthly net buying since September 2024. A shift away from tech-heavy stocks due to concerns over overvaluation is prompting market participants to move capital back into regional Asian assets, particularly India.
Factors such as declining crude oil prices and a decline in the US dollar are also contributing to the Rupee's resilience. Inflation is relatively lower in India compared to its peers, which has a positive effect on the currency. The Reserve Bank of India (RBI) actively manages the exchange rate through interventions and interest rate adjustments to maintain stability and control inflation.
External factors like crude oil prices, US dollar value, and foreign investments significantly impact the INR. The RBI plays a crucial role in managing the exchange rate and inflation through interest rate adjustments.
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