Indian Rupee strengthens
| Photo Credit: Reuters
The Indian rupee appreciated to a two-month high of ₹94.60 against the dollar on September 3, a day after the Reserve Bank of India (RBI) mopped up $137 billion through FCNR(B) deposits, ECBs (external commercial borrowings) and OFCBs (overseas foreign currency borrowings).The domestic currency opened at ₹94.30, down 50 paise from the previous close of ₹94.70 against the dollar. The rupee then gradually weakened to settle at the day’s closing level.The foreign exchange rate rose 7.3% year-on-year, driven by pressure from Foreign Institutional Investor (FII) outflows from India’s stock market. These capital outflows put pressure on India’s balance of payments. To strengthen the country’s foreign exchange reserves, the RBI introduced a swap facility and absorbed the associated costs. This helped attract a substantial $127 billion in FCNR(B) deposits—dollar-denominated deposits from non-resident Indians (NRIs).“Rupee remained strong at 94.48 against the dollar, supported by improved dollar liquidity as FCNR deposits of around $127 billion provide additional buffers to manage sharp currency movements and prevent a rapid fall in the rupee. Going ahead, market participants will closely track key U.S. employment indicators, particularly non-farm payrolls and unemployment data, which could influence the dollar and Fed rate expectations. Rupee is expected to maintain a positive bias, with the range seen between 94.25–95.00,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities. Published - September 03, 2026 06:37 pm IST
