Indian rupee posts biggest weekly gain in 20 months as RBI stands aside

The Indian rupee rose its highest level in nearly six months at the end of this week, gaining for a third straight session, with traders saying the central bank refrained from currency intervention as foreign investors piled into equity markets.

The rupee rose nearly 2% for the week, its biggest weekly gain since the week ending Dec. 21, 2018 when it rose 2.4%.

The currency had been trading in a tight range until this week, as the Reserve Bank of India was seen regularly buying dollars via state-run banks to prevent a sharp appreciation in the rupee.

The partially convertible rupee INR=IN ended Friday at 73.3850 per dollar, up 0.6% on day. It had risen to 73.28 earlier, its strongest level since March 5.

“The sharp fall in dollar/rupee spot has been very unexpected and traders are in shock, with every major support being tested,” said Rahul Gupta, head of currency research at Emkay Global Financial Services.