The Indian rupee recorded one of its steepest single-day gains in recent years on Thursday, appreciating by 156 paise to close at 93.14 (provisional) against the US dollar, after the Reserve Bank of India introduced a series of measures to curb banks’ activity in onshore forward markets.
Despite the sharp recovery, the domestic currency remained under pressure due to continued foreign capital outflows, a stronger US dollar and rising crude oil prices amid ongoing geopolitical uncertainty, according to forex analysts.
At the interbank foreign exchange market, the rupee opened weaker at 94.62 but staged a dramatic rebound, surging 188 paise during the session to hit an intraday high of 92.82 against the greenback. By the close, it settled at 93.14, marking a gain of 156 paise, or 1.6 per cent, compared to its previous close.
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Earlier in the week, the rupee had slipped past the 95 mark on Monday before ending at 94.70. It had also touched a record low of 94.84 on Friday, prompting the central bank to step in with corrective measures. Forex markets remained shut on Tuesday due to the Mahavir Jayanti holiday and on Wednesday for banks’ annual account closure.
In a circular issued on March 27, 2026, the RBI capped banks’ net open positions in the rupee at USD 100 million and directed them to comply by April 10. A day later, it announced additional steps following a review of evolving market conditions.
The central bank said authorised forex dealers would no longer be allowed to offer non-deliverable derivative (NDF) contracts involving the rupee to residents or non-residents. It also barred the rebooking of any cancelled foreign exchange derivative contracts, whether deliverable or non-deliverable, after the issuance of these guidelines.
Since the onset of the West Asia conflict on February 28, 2026, the rupee has weakened by more than 4 per cent. Over the full fiscal year ending March 2026, the currency has declined by nearly 10 per cent against the US dollar.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, noted that the rupee posted its biggest single-day gain in over 12 years, driven largely by the RBI’s regulatory restrictions on banks. “This led to the selling of dollars by banks to meet compliance requirements,” he said.
He added that the rupee may continue to trade with a positive bias as banks unwind positions ahead of the April 10 deadline. However, he cautioned that global risk-off sentiment and elevated crude oil prices could continue to weigh on the currency at higher levels. According to him, the USD-INR spot rate is likely to move within a range of ₹92.20 to ₹93.20.
Meanwhile, the dollar index, which measures the greenback against a basket of six major currencies, was trading 0.60 per cent higher at 100.05.
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