The Indian rupee posted its strongest single-day gain in six weeks, climbing 47 paise to 91.51 against the dollar on Monday, according to Bloomberg. The likely intervention from the Reserve Bank of India (RBI) and some inflows helped the rupee to rise during the day.
The RBI sold aggressively in the non-deliverable forward (NDF) market before opening to ease the pressure from the Budget, dealers said. The currency opened at 91.80, and it moved in the range of 91.44-91.83. The intervention likely continued throughout the day to support the currency, they said.
Monday’s appreciation
Monday’s appreciation has made the rupee the best performer on Monday compared to other Asian currencies. This is followed by Chinese renminbi rising at 0.19% and Hong Kong dollar at 0.04%. However, the rupee continues to be the worst performer in FY26.
In the financial year so far, the currency has declined 7.08% and in just one month, it fell 1.5%.
What do market observers say?
“The RBI’s intervention through its dollar sales prevented the rupee from breaching 92 during the day. This intervention was complemented by modest foreign inflows, which provided additional support and enabled the rupee to strengthen gradually through the session,” said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors LLP.
He added that the RBI’s large short forward book would limit a sharp appreciation. “We could see 92.5-93 by March-end when RBI positions mature—unless they cap it firmly.” The RBI’s short dollar forward book stood at $62.4 billion in December, down $ 3.7 billion from the previous month, according to the latest RBI data.