Rupee logs best day in 30 months, rises nearly 1% against US dollar

Rupee rallies 0.9 per cent to 85.21 per dollar, its strongest one-day gain since November 2022, aided by RBI dollar sales, weaker greenback, and equity inflows

The rupee on Friday posted its biggest single day gain against the US dollar in over two and a half years, rising 0.9 per cent to 85.21 per dollar amid a broad-based weakness in the greenback owing to rising concerns over the US fiscal outlook.

 

This surge for the rupee, which had closed at 86 against the dollar on Thursday, is the steepest recorded since November 11, 2022. Friday’s gain wiped out all the losses for the Indian currency in 2025.

 

Market participants said the Reserve Bank of India (RBI) sold approximately $1 billion, further aiding the rupee’s rally that was also supported by traders unwinding long dollar positions. 

 

 

“This upward movement was primarily fuelled by a weaker US dollar and a strong performance in the domestic equity market,” said Dilip Parmar, Senior Research Analyst, HDFC Securities. The Sensex gained 0.95 per cent to close at 81,721.08 points. The dollar index, which measures the strength of the greenback against a basket of six major currencies, fell 0.5 per cent to 99.35 on Friday.                      

 

Dollar inflows from anchor investors ahead of two IPOs — Hotel Leela and Aegis Vopak Terminals, each aiming to raise around ₹4,000 crore — provided further impetus to the domestic unit, said dealers. 

   

“With U.S. markets closed on Monday, foreign investor inflows were front-loaded winto today's session, supporting the rupee. Additionally, the RBI was actively seen selling approximately $1 billion near higher levels, which further strengthened the Rupee,” said Amit Pabari, managing director at CR Forex. 

 

The rupee had seen a sharp depreciation at the beginning of this month, despite a decline in the dollar index, as foreign investors withdrew from domestic markets amid escalating tensions between India and Pakistan.  

 

So far in May, the rupee has depreciated 0.9 per cent against the US dollar. It was one of only three Asian currencies to weaken against the greenback during the month and the second-worst performing emerging market currency after the Hong Kong dollar.

 

However, this week, the currency clocked a 0.3 per cent gain, with its rebound on Friday helped recover losses for the calendar year as well as financial year 2025-26, after briefly breaching the 86 mark against the dollar on Thursday.

 

The rupee has appreciated by 0.5 per cent in the current calendar year and 0.3 per cent in FY26 so far. As on Thursday, the local currency was trading 0.6 per cent weaker for the financial year and 0.5 per cent for the calendar year.