The rupee ended the session up 0.1% at 93.8650, which had closed at 93.9750 in the previous session.
The currency has weakened about 4% so far in 2026, as oil prices surged in March and foreign investors, unnerved by the war in the Middle East, pulled money out of domestic stocks.
Analysts at Goldman Sachs compared growth forecasts for India while markets have moved to price in fiscal tightening, with economists saying some measures may overstate the impact.
On Tuesday, Brent crude oil futures settled just north of $100 a barrel, down from Monday’s peak of $114 a barrel.
“We remain particularly cautious on the path ahead for Asian currency and rate markets … even though the left tail risk of a catastrophic scenario may have been averted for now,” MUFG said in a note.
Indian equities and bonds have benefited from the collective relief seen in global financial markets. The benchmark Nifty 50 equity index rose around 2% while yields on the benchmark 10-year bond eased slightly.
Traders are still skeptical about a sustained rebound in risk sentiment. Uncertainty lingers as the world continues to grapple with energy shocks after Iran denied it was engaged in talks with the U.S.
The risk-off move seen in March is unlikely to begin meaningfully until there are signs of concrete progress on a diplomatic solution to the war, an FX salesperson at a foreign bank said.
On the day, the dollar index rose 0.1% to 99.3. Asian currencies traded choppily.
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