After hitting a record low of 95.21 per dollar on March 30, the rupee has recovered as the central bank used crisis-era tools to prop up the currency which was hit by foreign portfolio outflows and risks to India’s current account balance.
On Friday, the rupee closed 0.3% higher at 92.9250, after touching a one-week high of 92.66 in early trade.
Earlier in the day, the rupee made a temporary gain following a Reuters report that banks had halted bullion imports due to a delay in a government order, as traders priced in lower demand for the dollar, but the impact faded after the government released a list of authorized banks.
“In the near term, the rupee should trade between 92.50-94 as central bank measures have put a brake on the one-sided devaluation bias,” said an FX salesperson at a foreign bank.
After struggling at the bottom of the Asia FX pile until late March, the currency has risen nearly 2% since the first set of measures was announced on March 27, making it the second-best performer among major Asian peers in that timeframe.
So far in 2026, however, the rupee remains at the bottom of the regional peg as investors continue to weigh risks to the economy from weak capital flows and elevated energy prices.
“Japan and South Korea are supported by deep strategic reserves and fiscal space to stabilize domestic fuel prices. In contrast, India, the Philippines and Indonesia sit closer to the economic fault line, with thinner buffers and greater sensitivity to imported energy costs,” analysts said in the note.
Investors will be paying close attention to developments surrounding potential talks between the US and Iran over the weekend. Brent crude oil futures were last down 2% at $97 a barrel.
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