Rupee Strengthens Against A Softer Dollar, Despite High Inflation Reading

Rupee Today: The Indian currency strengthens to about 79.30 per dollar

The rupee strengthened sharply against a softer dollar, which is off its 20-year peak, broadly reflecting a general upswing in risk assets globally, despite a surge in domestic inflation last month after falling for three months before.

Bloomberg quoted the rupee last at 79.3112, compared to its previous close of 79.5313 and well off its record weak level of over 80 per dollar.

In early trade, the rupee gained 25 paise to 79.28 against the US dollar in early trade, according to PTI. 

That even as retail inflation rose back up to 7 per cent last month, stalling a three-month downtrend and in contrast to the Reserve Bank of India's slowing price pressures expectations.

While that inflation surge suggests more aggressive rate hikes by the RBI, falling crude prices, ribust capital inflows have supported the Indian currency.

Crude oil is down about 30 per cent since the middle of June and back to levels not seen since Russia invaded Ukraine.

But the expected softer reading of US inflation due later on Tuesday was driving a global risk assets' rally and weighed on the dollar, helping the domestic currency.  

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