Rupee Gains 82 Paise To 94.96, RBI Measures Extend Currency Recovery

Mumbai: By October 13, the Indian rupee had strengthened by 82 paise to reach 94.96 against the US dollar, showing a continued recovery. This marked its biggest single-day gain in over half a year, climbing from an opening rate of 95.53 to 94.96. The improvement was attributed to several measures by the Reserve Bank of India (RBI), aimed at reducing demand for the dollar in spot markets and limiting speculative currency positions.

Forex traders noted the impact of a dedicated dollar window for oil marketing companies, higher costs for certain foreign exchange hedging transactions, and the RBI's sale of 10-year bonds worth ₹25,000 crore, which added to the pressure on the rupee. The central bank also tightened forex derivative rules and introduced a 20% reserve requirement for specified dollar-purchase hedging transactions exceeding $2 million.

These actions are expected to shift dollar demand away from the spot market and discourage speculative bets against the rupee. Analysts projected the dollar-rupee pair could move to the 95.00-94.80 range in the near term, supported by the RBI's interventions. Meanwhile, the dollar index slipped slightly, and Brent crude futures fell, although oil prices remained high.

Domestic equities also traded higher, with the Sensex at 72,224.15 and the Nifty at 22,458.50. Despite this, foreign institutional investors sold equities worth ₹1,708.48 crore on Monday, and retail inflation rose to 5.54% in September, driven by higher food prices.