The Indian rupee registered its
best trading session in more than six weeks on Monday, as likely
intervention from the central bank added to the impact of a
plunge in oil prices and triggered stop-losses for long dollar
positions.
The rupee opened at 96.1475 against the U.S. dollar
and climbed to an intraday high of 95.7950, having settled at
96.5625 in the previous session.
It ended 0.7Per cent higher on Monday, biggest single session gain
since June 12.
The currency, already buoyed by falling oil prices, saw its
rally pick up pace after the dollar/rupee pair slipped below the
96.14-96.16 range and plunged to around 95.80 within minutes.
Traders said several factors drove the rally: oil prices
extended their slide following the U.S.-Iran pause in attacks,
the rupee had broken through near-term resistance levels, while
the Reserve Bank of India’s dollar selling further boosted
momentum.
“The recent rise in USD/INR was primarily driven by higher
crude oil prices. With geopolitical concerns easing today, the
rupee is expected to see a meaningful appreciation on a
mean-reversion basis, especially relative to global and Asian
currencies,” said Dhaval Shah, founder and managing director,
De-Risk Forex Consultancy.
“Additionally, inflows through the FCNR(B) scheme and
continued foreign investment in domestic equity markets are
providing further support to the rupee.”
The RBI’s measures to attract foreign currency inflows have
drawn in nearly $32 billion, RBI Governor Sanjay Malhotra told
The Hindu BusinessLine in an interview published on Monday.
Alongside dollar sales in the spot market, the RBI also
conducted buy/sell swaps, which weighed on forward premiums, per
traders. The one-year implied interest rate dropped about 10
basis points to 2.82 per cent.
Estimates of Monday’s intervention ranged from roughly $1.5
billion to $3 billion, according to three traders, with bankers
saying the central bank was active in both the spot and
non-deliverable forward markets.
The RBI has intervened to the tune of around $1.5 billion in
the spot market, said Anil Kumar Bhansali, head of treasury at
Finrex Treasury Advisors.
Meanwhile, the decline in oil prices added to the rupee’s
momentum, with Brent crude falling nearly 10% during Asian
trading to slip below $88 per barrel.
Published on July 27, 2026
