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Rupee depreciates against dollar despite RBI's liquidity push

06 Mar 2025 Evaluate

Indian rupee depreciated against the U.S. dollar on Thursday amid the strengthening American currency. Traders overlooked report that Reserve Bank of India (RBI) has come up with more measures including the purchase of government bonds under open market operations (OMO) and foreign currency swaps, with an aim to ease the tight liquidity conditions in the banking system. As part of the measures, the RBI will conduct OMO purchase auctions of Government of India securities for an aggregate amount of Rs 1,00,000 crore in two tranches of Rs 50,000 crore each to be held on March 12, 2025 and March 18, 2025. On the global front, Japanese yen strengthened against other major currencies on Thursday, in reaction to the Bank of Japan's (BoJ) hawkish monetary policy outlook. Additionally, concerns about a worsening global trade war are driving up demand for safe haven currency like JPY. 

Finally, the rupee ended at 87.12 (Provisional), depreciated by 5 paise from its previous close of 87.07 on Wednesday. The currency touched a high and low of 87.16 and 86.88 respectively.

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