Rupee Rebounds 55 Paise After RBI Steps In to Stabilize Currency
The Indian rupee staged a strong recovery on Thursday, gaining 55 paise to close at Rs 91.6 per dollar, up from Wednesday's close of Rs 92.15. This rebound came after the Reserve Bank of India (RBI) intervened through state-run banks in both the non-deliverable forward and spot markets to support the domestic currency, which had fallen to a record low earlier in the week.
Market Dynamics and RBI Action
The rupee opened around the 91 level and traded within an intraday range of Rs 91.40 to Rs 91.64 per dollar. Dealers reported that the RBI stepped in through large banks to stabilize the unit after it plummeted to a record low of Rs 92.3 on Wednesday. Aggressive dollar sales by state-run banks were cited as a key factor that lifted the currency during the trading session.
Abhishek Goenka, founder of IFA Global, commented, "The currency traded within an intraday range of Rs 91.40-Rs 91.64 per dollar following the RBI intervention, which reportedly sold dollars through state-run banks to stabilise the currency." He added that sentiment improved marginally later in the session due to reports that Iran signaled a conditional willingness to abandon its nuclear program if the United States presents an acceptable alternative proposal.
Geopolitical Influences and Future Outlook
In the near term, the rupee is expected to remain sensitive to crude oil price movements and geopolitical developments. Bankers anticipate the RBI to be a major participant in the forex markets, given the heightened geopolitical risks. The rupee touched an intraday high of Rs 91.41 before settling at Rs 91.6 per dollar. Concurrently, India's benchmark equity indices rose around 1%, with most Asian stocks advancing and regional currencies trading mixed.
Oil price volatility also played a role in influencing the currency, as traders closely monitored developments in ongoing conflicts, including tensions in the Middle East. The RBI's proactive measures underscore its commitment to maintaining currency stability amid external pressures.
