Rupee Hits 10-Week High at ₹86/USD, Becomes Asia’s Top Performer Amid Surging FII Inflows

Strengthening trade data, rising forex reserves, and bullish equity markets drive rupee appreciation; Nifty and Sensex log strongest weekly gains in years.

March 22, 2025: Mumbai – The Indian rupee climbed to a 10-week high of ₹86 against the US dollar on Friday, emerging as the top-performing Asian currency so far in March. The domestic currency gained strength on the back of robust foreign inflows into equities and debt, RBI’s forex market interventions, and better-than-expected trade data.

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The rupee closed at ₹85.98/USD, appreciating nearly 0.1% on the day and logging its eighth straight session of gains. On a weekly basis, the rupee jumped 1.1%, marking one of its strongest performances in recent months.

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“The Reserve Bank of India’s USD/INR swap intervention played a key role in stabilising and boosting the rupee,” said Dilip Parmar, Research Analyst at HDFC Securities. “With this, the rupee has outpaced all major Asian currencies in performance this month.”

Parmar also noted short-term support at ₹85.70 and resistance at ₹86.45 for the currency.

Jateen Trivedi, VP – Research at LKP Securities, attributed the rupee’s strength to strong foreign institutional investor (FII) activity and the Fed’s dovish stance. “The US Fed keeping interest rates unchanged, along with a projection of lower future rates, pulled down the dollar, aiding the rupee,” he said.

📈 Equity Markets Continue Bull Run

The currency’s rally was accompanied by robust action in the stock market. The NSE Nifty surged 159 points (0.69%) to close at 23,350, while the Sensex jumped 557 points (0.73%) to settle at 76,906. This marks the fifth consecutive session of gains for Indian equities.

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“The Nifty posted a 4.26% gain this week, its best weekly return since February 2021,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

Market breadth was positive with Media, Oil & Gas, PSU Banks, and Pharma sectors leading the charge. Metal and Consumer Durables were the only laggards.

📊 Mid & Small Caps Shine Bright

Mid and small-cap segments outperformed the broader markets:

Nifty Midcap 100: +1.38% (Weekly gain: +7.74%) – Best since April 2020
Nifty Smallcap 100: +2.06% (Weekly gain: +8.64%) – Best since June 2020

“Momentum in the mid and small-cap space indicates broad-based market participation and underlying strength,” Vakil added.

🔮 Market Outlook

Analysts maintain a positive outlook for the rupee and equity markets, citing:

Robust capital inflows
RBI’s proactive intervention
Global liquidity support due to dovish central bank signals
Strong investor sentiment in domestic equities

As long as global risk sentiment remains stable and FII inflows persist, the rupee could test stronger levels, while equity markets may aim for fresh highs, provided Nifty holds above 23,000 support.

Tags: rupee today, INR vs USD, rupee appreciation, RBI forex intervention, USD INR swap, foreign inflows, FII buying, Indian equity market, Nifty rally, Sensex rally, RBI news, forex reserves, rupee forecast, Lalatendu Mishra, HDFC Securities, LKP Securities

News Desk