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The INDIA RUPEE is on the rise, and near-tenor swap maturitys reduce central bank's forward books

The Indian rupee edged up Tuesday, following regional peers as well as the dollar index's fall to a 3-year low amid persistent concerns over U.S. fiscal policies and trade.

The Reserve Bank of India released data after the close of the market on Monday showing that its FX forward book had shrunk to $65.2 billion by the end of the month, from $72.6 billion the previous month. Data is released one month after the event.

Reserve Bank of India’s aggregate short dollar positions in FX futures and forwards reached a new record in February, amid dollar selling interventions by the central banks to support the rupee.

The rupee is up about 2.5% from its all-time low in February of 87.95, thanks to the dollar's weakness.

The central bank's short dollar position was likely affected by the maturity of the near-term swaps, which were worth $7.4 billion for the bucket up to one month in April.

The RBI has opportunistically revalued some of its short dollar positions, while also allowing some positions to mature, said B. Prasanna.

The dollar index fell to its lowest level in many years on the back of concerns over the U.S. budget deficit and the uncertainty surrounding trade agreements with major countries.

As of 10:20 am IST, the rupee had risen 0.2% to 85.59 US dollars.

U.S. Treasury secretary Scott Bessent warned Monday that as the deadline of July 9 approaches, countries may be informed about sharply increased tariffs. White House officials said an update was due "very soon" on the trade agreement with India. (Reporting and editing by Jaspreet K. Kalra)

(source: Reuters)