Rupee posts sharpest rise in over a decade after RBI steps in

The Indian rupee recorded its strongest single-day gain in more than 12 years on 2 April, buoyed by fresh measures from the Reserve Bank of India (RBI) aimed at stabilising the currency market.

The rupee appreciated by as much as 1.8 per cent to 93.17 against the US dollar, marking its biggest advance since September 2013. The surge came as trading resumed after a two-day break, with market participants reacting to the central bank’s latest interventions.

On 1 April, the RBI introduced restrictions preventing banks from offering rupee non-deliverable forwards (NDFs) to both resident and non-resident clients. It also barred companies from re-booking cancelled foreign exchange derivative contracts, in a move designed to curb speculative activity.

Analysts said the steps are likely to prompt banks and corporates to unwind offshore long dollar positions, easing demand for the US currency and lending support to the rupee.

Market experts noted that the measures could create a near-term appreciation bias or at least improve stability in the currency, which has faced sustained pressure over the past year.

The rupee had a difficult run in the previous financial year, marking its weakest performance in over a decade. A combination of rising crude oil prices and persistent foreign capital outflows weighed heavily on the currency. It briefly breached the psychologically important level of 95 per dollar on 30 March, despite earlier attempts by the RBI to limit banks’ exposure to open currency positions.

Meanwhile, global factors continue to pose risks. Oil prices have surged amid escalating geopolitical tensions following remarks by US President Donald Trump, who signalled a potential intensification of the conflict with Iran. Brent crude climbed to around $106 per barrel after his address, raising concerns about inflation and external imbalances for oil-importing countries such as India.

Although Trump suggested that US military objectives could soon be achieved, he also warned of further strikes if Iran does not agree to American terms in ongoing negotiations, adding to uncertainty in global markets.

The rupee’s sharp rebound reflects the immediate impact of policy action, but analysts caution that its trajectory will remain closely tied to external developments, particularly oil prices and capital flows.

With PTI, IANS inputs