The rupee posted its sharpest single-day gain in nearly two months on Friday — its biggest rise since April 2 — on the back of a decline in crude oil prices and likely intervention by the Reserve Bank of India (RBI), dealers said.
The rupee settled at 95 per dollar, its highest level since May 8, up 0.73 per cent from the previous close of 95.70. The Indian unit was the best-performing Asian currency on Friday, followed by the Thai baht, which gained 0.37 per cent.
Brent crude prices fell nearly 2 per cent to around $91 per barrel on expectations of easing supply disruptions after reports suggested that the United States and Iran could extend a ceasefire agreement and resume shipping through the Strait of Hormuz.
Market participants said state-owned banks likely sold dollars on behalf of the RBI, helping offset pressure from elevated dollar demand linked to maturing positions in the non-deliverable forwards (NDF) market.
“The RBI intervened ahead of market open, which led to the rupee opening stronger by around 20 paise compared to NDF levels,” said a dealer at a state-owned bank.
The rupee appreciated to an intraday high of 94.96, its strongest level since May 11. The local currency had fallen to a low of 96.96 last week. However, after hitting that trough, the rupee managed to recover most of its losses. In May, the currency was marginally down by 0.09 per cent against the dollar.
The rupee has depreciated nearly 10 per cent over the past year and has fallen 5.4 per cent against the dollar so far in 2026. “The Indian rupee outperformed its Asian peers, bolstered by falling crude oil prices and suspected interventions by the RBI,” said Dilip Parmar, research analyst at HDFC Securities.
“The currency also recorded its largest single-day gain since April 2, driven by aggressive central bank action and market optimism surrounding a tentative extension of the US-Iran ceasefire. From a technical perspective, spot USD/INR is expected to trend lower towards the 94.50-94.30 levels, with immediate resistance at 95.70,” Parmar added.
India’s foreign exchange reserves fell to a more than one-year low of $681.38 billion in the week ended May 22, the lowest since the week ended April 11, 2025. The reserves declined due to a fall in both gold reserves and foreign currency assets during the reported week.
Foreign exchange reserves have dropped by $47.11 billion from the record high of $728.49 billion touched in the week ended February 27 this year. Gold reserves fell by $4.5 billion during the week due to revaluation losses, as gold prices declined 0.68 per cent to $4,509 per ounce. Foreign currency assets declined by $2.87 billion to $543 billion during the reported week.
