Indian Rupee hits fresh two-month high against US Dollar

The Indian Rupee reached a fresh two-month high against the US Dollar on Thursday, trading at 94.28. This surge was driven by a significant inflow of foreign exchange reserves, with India attracting a larger-than-expected $136.38 billion through special foreign-currency mobilization schemes. The Reserve Bank of India (RBI) was able to contain more pressure on the rupee due to this increased FX reserves.

Additionally, the US Dollar Index (DXY) declined, adding to the pressure on the USD/INR pair. The rupee's strength was further supported by a weaker-than-expected US job report, which suggested a less robust US labor market. Analysts also noted India's real GDP growth of 7.8% in Q2 2026, which outperformed the RBI's forecast. However, they cautioned that risks to this growth outlook include sharp reversals in food and energy prices, a weakening domestic economy, or evidence that the reported GDP growth overstates underlying demand momentum.