Topic: Dollar-rupee swap

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The Russia-Ukraine crisis has led to a rush towards safe haven assets such as gold and the US dollar. Investors are selling riskier assets such as Indian equities.

The prospect of a rare current-account surplus following robust foreign inflows & global oil-price collapse will help nudge the rupee higher, analysts say.The prospect of a rare current-account surplus following robust foreign inflows & global oil-price collapse will help nudge the rupee higher, analysts say.

Forex traders said positive start of domestic stocks and improved market sentiments with countries gradually lifting lockdowns supported the local unit.

Traders said investor sentiments remained fragile amid concerns over the impact of coronavirus outbreak on the domestic as well as global economy.

A persistent and large deficit fails to pressure the dollar upwards, relative to the rupee, resulting in the latter’s overvaluation.

The maiden dollar-rupee swap conducted by the RBI last week helped foreign exchange reserves swell by a healthy $5.237 billion to $411.905 billion in the week to 29 March.