The Indian rupee strengthened to a one-month high on Thursday, buoyed by firm intervention from the Reserve Bank of India (RBI) and growing optimism around ongoing U.S.-India trade negotiations.
The domestic currency opened strong and touched an intraday high of ₹87.70 per U.S. dollar before settling at ₹87.82, marking a 0.3% gain for the day. This recovery comes after the rupee advanced nearly 1% from Tuesday’s closing level, as the RBI’s aggressive moves helped curb speculative pressure in the currency market.
Traders said the central bank’s decisive action—seen during the rupee’s recent struggle near the ₹88.80 mark—has discouraged bearish bets, especially from offshore players who had wagered on the rupee sliding below ₹90.
“RBI’s intervention sent a clear message to speculators,” said a senior trader at a foreign bank. “This has triggered unwinding of short INR positions in the near term.”
However, analysts noted that some mild weakness in the rupee could still be beneficial for India’s export competitiveness. “Over the medium term, modest FX weakness isn’t necessarily negative for India,” said Michael Wan, Senior Currency Analyst at MUFG. “We will look for opportunities to go long USD/INR later, depending on where the market stabilizes.”
Adding to market sentiment, U.S. President Donald Trump said on Wednesday that Prime Minister Narendra Modi had agreed to halt crude oil imports from Russia, signaling deepening energy cooperation between New Delhi and Washington. Indian officials confirmed that talks with the U.S. are underway to strengthen bilateral energy and trade ties.
Analysts believe that a breakthrough in trade talks could briefly propel the rupee higher, though the long-term impact will depend on global economic trends and domestic growth momentum.
Meanwhile, broader currency markets remained calm, with the U.S. dollar index steady at 98.6 and most Asian currencies trading in narrow ranges.
