The Indian rupee strengthens by 71 paise to 86.76 against the dollar, aided by RBI intervention
The Indian rupee recorded a sharp rebound, rising 71 paise to close at 86.76 against the US dollar, marking its biggest single-day gain since February 2020. The surge follows reported intervention by the Reserve Bank of India (RBI), which stepped in to curb speculative pressure and stabilize the currency.
After days of depreciation, the RBI’s forex market action helped the rupee recover from its recent lows, restoring investor confidence. Market analysts suggest that external factors, including a fluctuating dollar index and global economic uncertainties, continue to shape the rupee’s trajectory.
RBI’s Potential Role in the Rupee’s Recovery
Traders together with analysts believe that the RBI made decisions in the currency sector to support the stabilization of the Indian rupee. The RBI made reported interventions through late Monday and until Tuesday. Lawmakers enacted this action as a strategy to stop speculative activities that caused the rupee’s depreciation. The RBI’s intervention in currency markets managed to drive the rupee rate back below 87 since February 3.
The recent recovery of the rupee stands out given its persistent battles with foreign market pressures. The RBI’s recent intervention led experts to agree that it played a major part in ending the downward trend of the currency.
External Factors Impacting the Rupee
The Indian rupee has faced multiple external weighty factors over the past few months. The rupee weakened because of the increasing power of the US dollar against international monetary units. Other factors such as US trade policy measures through tariff actions have worsened the conditions of emerging market currencies. The US trade policy disputes with other countries resulted in escalated market volatility throughout financial markets worldwide.
Foreign institutional investor sell-offs in India’s stock market contribute to the depreciation of the rupee along with other listed challenges. Foreign funds withdrawing capital from India leads to enhanced rupee currency instability because this creates additional strain on the Indian monetary system. The combination of these factors has produced increased market uncertainties in India’s foreign exchange markets.
Market Reaction and Future Outlook
Tuesday brought minor gains to the rupee after the dollar index displayed light fluctuations in afternoon sessions. The modification of the dollar index value seems to have contributed to the strengthening of the rupee. Markets remain cautious about anticipating forthcoming US statistics which include Consumer Price Index (CPI) figures along with Federal Reserve chair Jerome Powell’s testimony because these patterns affect rupee values.
