Taking a break from its losing streak, the Indian rupee on Thursday opened at 90.35, nearly unchanged from its previous close of 90.37 against the US dollar. On Wednesday, the currency staged a sharp recovery, appreciating by nearly 1% against the greenback and posting its strongest single-day gain since October 15, 2025.
What’s triggering the recovery in rupee
RBI intervention
According to traders, state-run banks stepped in on behalf of the RBI on Thursday and sold dollars aggressively to help prevent further losses. Owing to the central bank’s intervention, the local currency recovered by 66 paise on Wednesday and touched an intra-day high of 90.09 before closing at Rs 90.37 against the US dollar, marking its biggest single-day gain in two months.
Rupee could have breached 92 without RBI intervention
“Without the RBI intervention, market speculation would have driven the rupee even weaker, with more short positions risking a slide to even 91.5–92. The RBI drew a clear line at 91 today (Wednesday) through its tactical intervention,” Dhiraj Nim, economist and FX strategist at ANZ Bank, told Financial Express.
Previously, a similar intervention was seen in October, when the RBI pulled back the rupee to 87.99 from the 88.80 level.
Rupee’s rollercoaster move this week
The recovery comes as a surprise, as just on Tuesday the Indian rupee had breached the crucial 91-level mark against the dollar and slipped to a historic low of 91.08 against the US dollar.
The currency’s movement has been highly volatile, with the slide from 90 to 91 taking place over the last two weeks. The rupee has been hitting multiple record lows over the past week.
So far in FY26, the currency has depreciated by 6.5%, marking its worst performance in over three years and making it the worst-performing Asian currency of 2025.
Sentiment-based depreciation may continue if trade deal not finalised
Traders have cautioned that the central bank’s intervention was largely aimed at preventing the rupee from sliding further past the 91 level. However, depreciation pressures may continue due to the lack of clarity over a trade deal between India and the US, along with persistent foreign equity outflows from domestic markets.
“The market should stay calmer for a few days. However, we expect a gradual depreciation, especially if tariffs remain. Our forecast for the rupee is 90 by March, assuming seasonality plays out, followed by a gradual drift upwards,” Nim told Financial Express.
Bank of Baroda also expects a trade deal to be finalised by March 2026.