The rupee has recovered from 96.79 per dollar to around the 95 level after the Reserve Bank of India's latest measures, which make speculative bets costlier and restrict rebooking of cancelled FX derivatives. Strategists still expect the currency to weaken toward end-2026 and mid-2027, with S&P Global Market Intelligence forecasting about 97 per dollar by end-2026 and 98 by mid-2027, and a move to 100 cannot be ruled out. Since the FCNR-B scheme closed on Aug. 30, the rupee has fallen 1.9%, and RBI dollar sales have cut foreign reserves by $51 billion as of Oct. 2, according to Ambit Capital. Pressures include high oil prices from the Iran war, a wider current account deficit, and foreign investors selling $32.5 billion of Indian equities this year through Oct. 13. HDFC Securities says the RBI steps offer only short-to-medium-term stability, not long-term structural support.
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Related news
- RBI broadens Rupee defence beyond dollar sales , turns to tighter monetary conditions : Report
According to a source cited by Reuters, the RBI is in calibrated tightening mode across the board and will keep assessing further steps, including liquidity measures. It could discuss a 50-basis-point rate hike at its December review if inflation warrants front-loading, a possibility HSBC and State Bank of India have also flagged. Since March, the RBI has mobilised about $150 billion through inflow-attracting measures, while continued dollar sales have drawn down reserves and the cost of betting against the rupee has hit a five-year high. Domestic bond yields have risen 45 to 60 basis points since early September, and overseas investors have sold nearly $33 billion of Indian equities this year. Analysts warn that rapid tightening could slow growth, as nearly 60% of loans are linked to external benchmarks such as the policy rate and would reprice quickly.
- Rupee gains 20 paise against US dollar as RBI support kicks in , greenback weakens
The rupee opened Friday 20 paise higher at 94.79 per US dollar, extending Thursday's 18-paise gain, as the dollar weakened and the Reserve Bank of India's structural forex interventions provided support. Gains were limited by elevated crude prices, with Brent trading at $105.35 a barrel, and a negative start on Dalal Street, though the Sensex later turned positive and gained 400 points. The dollar index fell 0.54% to 102 and US Treasury yields eased. Foreign institutional investors were net sellers of domestic equities worth Rs 5,285.37 crore on Thursday.
- India Forex Reserves Fall $8 . 6 Billion To $726 Billion As RBI Defends Rupee
India's forex reserves fell $8.6 billion to $726 billion in the week ended October 9, marking their fifth straight weekly decline as the Reserve Bank of India (RBI) intervened to stabilise the rupee. The cumulative fall over five weeks is about $59.7 billion, after reserves hit a record $785.71 billion on September 4. The drop reflects high crude oil prices, foreign portfolio outflows and persistent dollar demand. The rupee closed at 94.96 per dollar on Friday, up 1.9% for the week, after nearly hitting a record low of 96.96 earlier in October. The RBI has rolled out measures including a dedicated dollar window for state oil marketers, tighter forex derivatives rules and a risk reserve requirement, though these cannot eliminate underlying dollar demand.
- Rupee rises 1 . 9 % in a week , closes below 95 per dollar
- $60 billion in 6 weeks : RBI rupee defence comes at a cost
- RBI forex remittance rules: No meddling as middlemen in forex conversion by banks: New rules forbid conversion of foreign earnings into rupees to detriment of exporters
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