Further, top U.S. banking regulators said late on Monday
they planned to tell Congress that the overall financial system
remains on solid footing after recent bank failures, but they
would comprehensively review their policies.
"A powerful cocktail of risk-on sentiment, a declining
dollar index and year-end inflows of Indian corporations" was
helping the rupee, said Anindya Banerjee, head of research - FX
and interest rates, at Kotak Securities.
"Moreover, large speculative bets may be off limits because
it is the conclusion of the financial year."
Exporters were likely selling dollars ahead of the close of
the fiscal year-end and importers took advantage of the dip in
USD/INR to add hedges, a trader with a private bank said.
Meanwhile, analysts at foreign banks, such as Barclays and
Citi, reckoned that the rupee would have a better fiscal 2024,
as they expected the currency to head towards 80 per dollar
levels gradually, owing to India's improving current account
picture.
On Tuesday, rupee premiums declined across the curve as
traders said they were on the receiving end amid
better-than-expected liquidity.
(Reporting by Anushka Trivedi; Editing by Sonia Cheema)
By Anushka Trivedi
MUMBAI, March 28 (Reuters) - The Indian rupee advanced
against the U.S dollar on Tuesday as the rescue of failed lender
Silicon Valley Bank (SVB) calmed worries about a larger fallout
in the sector, with fiscal year-end related factors also
supporting the local currency.
The rupee finished at 82.1875 per dollar, against
its previous close of 82.37, getting a boost from the carry
return of running short dollar positions on account of the
upcoming change in the fiscal year.
Most Asian currencies and stocks rose as the dollar index dipped, while European shares gained as fears over a
banking crisis abated to an extent after the U.S. regulator
backed a deal by First Citizens BancShares to buy out
SVB.
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