Key Highlights:
- Intraday Movement: The Indian rupee appreciated to 83.76 per dollar in early Friday trade — its strongest level since September 30, 2024 (when it touched 83.71).
- Psychological Level Breached: This marked the first time since October 17, 2024, that the rupee moved below the 84/USD mark, triggering stop-loss orders and foreign inflows.
- Closing Rate: The rupee ended the day at 84.55, slightly weaker than Thursday’s close of 84.49.
RBI Intervention:
- Estimated Size: The Reserve Bank of India intervened with an estimated \$3 billion purchase of US dollars.
- Purpose: Aimed at containing rupee volatility and preserving export competitiveness.
- Market Reaction: Dealers cited heavy dollar buying by RBI as the key reason for the rupee’s retracement from its peak.
Bond Market Update
- New 10-Year G-Sec: The coupon for the freshly issued 10-year government bond was set at 6.33%, aligning with market expectations.
- Liquidity: It has quickly become the second most liquid on-the-run government security.
- India’s foreign exchange reserves are also at a 7-month high, reflecting robust external stability and capital inflows.
