Rupee hits best day since June, gain 0.7% on RBI action and global cues

The rupee appreciated by 0.7 per cent to settle at 88.07 per dollar, against the previous close of 88.80 per dollar. The domestic currency appreciated beyond 88 per dollar mark

The rupee on Wednesday posted its strongest single-day gain in almost four months, since June 24, driven by heavy intervention from the Reserve Bank of India (RBI) through dollar sales, dealers said. Some traders unwound their positions against the rupee, further supporting the local currency.

 

The rupee appreciated by 0.7 per cent to settle at 88.07 per dollar, up from the previous close of 88.8. During the day, the domestic currency rose past the 88 mark, touching a high of 87.95 per dollar.

 

“The rupee staged a remarkable comeback on Wednesday, rebounding from record lows to close around 88.07, as the RBI stepped in with decisive measures to counter what it described as ‘speculative attacks’ on the currency,” said Abhishek Goenka, founder and chief executive officer of IFA (India Forex Advisors) Global.

 

“The central bank’s aggressive dollar sales through state-run banks early in the session triggered a wave of short covering, swiftly reversing bearish sentiment that had built up over the past few days,” he added.

 

Market participants observed that the rupee’s sharp recovery was also driven by a weaker US dollar, following dovish remarks from US Federal Reserve Chairman Jerome Powell, which raised hopes of an upcoming rate cut. Positive global sentiment, supported by renewed optimism over US-China trade talks, also contributed to the currency’s gains. 

 

“The RBI began intervening in the non-deliverable forward market before the market opened and continued in the spot market,” said a dealer at a private bank. “This shifted sentiment, leading to the unwinding of short positions against the rupee and pushing it to the day’s high of 87.95 per dollar,” he added.

 

The dollar index fell 0.57 per cent to 98.85, reflecting the greenback’s strength against a basket of six major currencies.

 

“The main factor was that the Indian delegation had gone to the US for trade negotiations, and with rumours swirling around a deal that could be concluded, India might secure tariff rates between 16 per cent and 19 per cent instead of the existing 50 per cent,” said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors.

 

Although the rupee hovered near a record low this month, volatility remained subdued, likely due to central bank intervention, dealers said.

 

The rupee has depreciated 2.95 per cent in the current financial year (2025-26) and 2.79 per cent in the current calendar year. In October so far, the local currency has appreciated 0.82 per cent against the greenback.