Rupee strengthens to 94.86 per dollar as RBI measures and inflation concerns persist

Meanwhile, India's WPI inflation accelerated to 11.39% from 9.92%, with food inflation reaching 8.66%. Combined with CPI inflation of 5.54%, dual inflation pressure makes it very difficult for the RBI to turn dovish

The Indian currency opened stronger, below the 95 level, on Thursday at 94.91 per US Dollar, up 24 paise against the previous close of 95.15. The Rupee is currently trading at 94.9325.

Mumbai: The Indian rupee appreciated 31 paise to 94.86 against the US dollar in early trade on October 15, supported by RBI foreign exchange measures, reduced spot dollar demand and the unwinding of long dollar positions.The currency opened at 94.95 before strengthening to 94.86 at the interbank foreign exchange market. It had closed at 95.17 on Wednesday after gaining 19 paise.Market participants said central bank intervention continued supporting the recovery, although external macroeconomic pressures could restrict further appreciation.Rupee Gains 44 Paise To 94.92, RBI Measures Extend Currency Recovery RBI Measures Ease Dollar DemandThe Reserve Bank’s interventions include a special dollar window for oil companies, reducing their need to buy foreign currency in the spot market.Liquidity-tightening measures and the closing of long dollar positions have also contributed to the rupee’s advance, according to traders.Amit Pabari, managing director of CR Forex Advisors, said the currency had moved through the 95.50–95.00 range, bringing 94.80 into focus.He said a sustained decline in USD/INR below 94.80 could allow another 50–75 paise of rupee appreciation, with lower direct dollar demand from oil companies potentially supporting momentum.Inflation Shapes Interest Rate OutlookIndia’s wholesale inflation accelerated to 11.39 per cent from 9.92 per cent, while food inflation reached 8.66 per cent.Alongside consumer inflation of 5.54 per cent, these pressures leave limited room for a softer RBI policy stance.Pabari said expectations of rate increases over the next twelve months had strengthened. If implemented, tighter monetary policy could support the currency through favourable interest-rate differences and investment flows.Rice, Sugar & Pulses Turn Costlier Ahead Of Diwali, Global Supply Disruptions Raise Fresh Inflation Fears Dollar and Crude Oil RetreatThe dollar index declined 0.54 per cent to 101.99, while Brent crude futures fell 1.66 per cent to $104.30 a barrel.Domestic equities traded higher, with Sensex at 73,157.43 and Nifty at 22,726.05 during early trading.However, foreign institutional investors sold Indian shares worth ₹1,857.44 crore on Wednesday, according to exchange data, keeping overseas equity outflows among the risks to sustained currency gains.