The Indian rupee extended its recovery against the US dollar in early trade on Thursday, opening around 90.13 and strengthening to near 89.96, compared
with its previous close of about 90.20, said a TOI report. The rebound comes after a rough stretch earlier this week, when the rupee slid to record lows, briefly crossing the 91 mark against the dollar. Traders attributed the turnaround largely to strong intervention by the Reserve Bank of India (RBI). The central bank is believed to have sold dollars aggressively to curb the sharp slide, triggering short covering and disrupting one-way bearish bets on the rupee. Bankers said the move echoed RBI actions seen in October and November, when it stepped in across both spot and forward markets to rein in excessive volatility. External factors also offered support, with a softer US dollar and easing crude oil prices helping the local currency regain some ground. Meanwhile, State Bank of India expects a more sustained recovery in the rupee during the second half of the next financial year (October 2026–March 2027). In a recent report, SBI described the current weakness as cyclical rather than structural, citing historical trends. So far this year, the rupee has depreciated by over 5–6%, making it one of Asia’s weaker performers. The decline has been driven by heavy foreign outflows—over $18 billion from equities alone—along with trade tensions with the US and widening deficits. While the RBI’s intervention has brought near-term stability, market participants caution that pressure could resurface unless trade conditions improve or capital inflows pick up. For now, the rebound has provided some relief after a turbulent phase, with the rupee managing to hold near the 90-per-dollar level.
