Indian rupee: Rupee recovers from all-time low amid dollar index correction

Mumbai: The Indian rupee appreciated on Tuesday to close at 87.07 per dollar as an index which benchmarks the strength of the US currency relative to other units retreated after Washington deferred the decision to slap punitive tariffs on neighbours Mexico and Canada, traders said.

The dollar index was at 108.52, versus 109.8 on Monday. The appreciation in the local currency comes after the rupee closed a record low of 87.18 per dollar on Monday. The rupee was in a tight range throughout the day on Tuesday. It traded between 87/$1 and 87.13/$1. Most Asian currencies also appreciated in response to a slight correction in the dollar index.

“There seemed to be very muted activity by importers and exporters as well because the range of the movement was very narrow. It also seemed that there was no intervention from the Reserve Bank,” said Dilip Parmar, currency research analyst at HDFC Securities. Except for depreciation in the Taiwanese dollar and Japanese yen, Asian currencies appreciated, with Malaysian Ringgit appreciating the most at 0.66%, Bloomberg data showed.

Deficit in the banking system liquidity stood at ₹1.08 lakh crore, from peak deficits of ₹3.13 lakh crore seen in late January.

The weighted average call rate (WACR) stood at 6.50%, aligning with the repo rate.