The Indian rupee is briefly outperforming the US dollar in the currency exchange market in the last 30 days. The rupee had fallen to 83.22 in early February last month but recovered sooner than expected. The local currency went up to the 82.80 price range this month in March and recouped itself in the global forex markets.
Not just the rupee, several other local currencies fared better against the US dollar this month. Surprisingly, 10 local currencies outpaced the USD and came out on top in March 2024. Read here to know the list of the 10 local currencies that trounced the US dollar in 30 days.
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Currency: Why Is The Indian Rupee Rising & The US Dollar Falling?
The optimistic outlook on the Indian economy is making the rupee hold stronger against the US dollar. The Indian economy is receiving a continuous inflow of foreign funds as institutions are looking to partake in its growing GDP. The influx of foreign funds has boosted its stock market, the Sensex, as it climbed above the 72,000 points mark.
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In addition, India’s foreign exchange jumped from $6.55 billion to a staggering high of $625.63 billion in just two years. The country’s gold reserves also skyrocketed from $569 million in 2021 to $48.4 billion this week in March 2024, reported the Reserve Bank of India (RBI). All these developments are making the Indian rupee gain an advantage against the US dollar in the foreign exchange markets.
On the other hand, the US is reeling in a $34.4 trillion debt and other countries are cutting ties with the dollar. The currency markets will throw in lots of surprises this year if the US does not control its growing debt.
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Also, currency traders are confident that the Indian rupee will reach 82 by the end of the year. Reuters reported that currency traders have taken long positions in favor of the Indian rupee and not the US dollar. Reports indicate that the Indian rupee could end 2024 on a high and leave the US dollar behind.