06.02.202605:24:47UTC+00Indian Rupee Hits Over 3-Week High on RBI Rate Hold

The Indian rupee appreciated to approximately 90.2 per dollar, marking its highest level in over three weeks. This strength follows signals from the central bank indicating ongoing policy stability. The Reserve Bank of India opted to maintain its key repo rate steady at 5.25%, aligning with market expectations. This decision reflects a positive outlook on inflation and reassures markets of continued accommodative conditions. Additionally, the rupee is buoyed by lingering optimism regarding the US-India trade agreement, which significantly reduces US tariffs on Indian imports from nearly 50% to 18%, safeguarding agricultural and key export sectors. Furthermore, sporadic dollar sales and relatively low market positioning have bolstered the rupee, despite facing external challenges and a delicate risk scenario. Analysts suggest that short-term currency movements will largely depend on global risk sentiment, capital flows, and the clarity surrounding the trade deal’s implementation, in addition to developments in the Budget session.