The Indian rupee climbed to its strongest level this year on Wednesday, supported by a combination of fresh foreign inflows and optimism around a possible trade agreement with the United States. The local currency appreciated by up to 0.5%, touching 84.65 against the U.S. dollar — the best rate recorded in 2025 so far.
A weaker dollar globally has helped boost emerging market currencies, and the rupee is benefiting from that trend as well. Despite rising tensions with Pakistan, investors continue to show strong interest in Indian assets.
In the past nine trading sessions, foreign investors have pumped $4.12 billion into Indian stocks, marking the most aggressive buying spree since mid-2023. So far this month alone, overseas funds have invested over $970 million in equities, reversing their earlier stance when they had sold more than $3 billion.
These strong inflows have placed Indian markets among the top performers in Asia this month, reflecting growing confidence in the country’s economic outlook and stability.
Analysts believe that continued momentum in foreign investment, along with clarity on trade ties with the U.S., could further strengthen the rupee and support market sentiment in the near term.
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