Rupee hits two-month high: Three factors driving the Indian currency

The Indian rupee on Monday hit a fresh two-month high in early trade. It rose by 5 paise to 64.10  amid dollar's slide in international forex market.

It hit a two-month high of 64.08 level today. On April 1, 2017, the Indian currency closed at 64.06 level.

The currency is up nearly 6 percent this year.

We look at factors why rupee has been moving in a positive direction.

Strong domestic institutional investors (DIIs) interest

DIIs have poured in Rs 3017.94 crore till 28 July this month against Rs 2661.79 crore during the same period. During the last 10 months , DIIs have pushed Rs 58562.88 crore, signalling strong faith in the Indian growth story.

Dollar slide

On December 28, 2016, the US currency was at 103.22 level, the highest in an year on Donald Trump's election as President.

Since then, it has taken a downward route. Today, the dollar is at 93.34 level.

The dollar's slide overseas amid concerns over renewed show of strength on the Korean Peninsula and a strong opening of the domestic equities supported the rupee uptrend today.

Indian stock market

During the last one year, the Nifty has risen 1405 points or 16.27 percent. The Sensex too has risen 15.67 percent or 4396.3 points. The market's climb signals the faith of foreign institutional investors (FIIs) in the Indian growth and reforms story. FII net investment in Indian debt and equities this fiscal is at a robust US$ 14 billion as against previous fiscal figure of $8 billion.