Indian rupee rises near 95.62 as dollar slips

The Indian rupee strengthened to around 95.62 per dollar, after a three-week low as the weaker dollar and US Treasury yields supported the currency.

The dollar index fell 0.88% on Wednesday, its biggest drop since mid-March, after the US Treasury planned to double liquidity-support buybacks for longer-dated bonds to at least $4 billion per operation, easing pressure in the US bond market.

However, the rupee's recovery is likely to remain limited as Brent crude hovers near $92 a barrel, as markets assess the US-Iran conflict and shipping disruption through the Strait of Hormuz.

Meanwhile, RBI Governor Sanjay Malhotra said the central bank's net short forward-dollar position remains “very manageable,” as the RBI expects at least $80 billion in inflows from FCNR(B) deposits and foreign-currency borrowing.

He said intervention will focus on curbing volatility and speculation, while the earlier FCNR(B) swap closure reflected stronger inflows and rising sterilisation costs.