Rupee Opens February on Stronger Footing, Gains 18 Paise Against US Dollar
The Indian rupee began February on a positive note, appreciating by 18 paise to trade at 91.75 against the US dollar during early trading hours on Monday. This upward movement marks a recovery from last week's weakness, when the domestic currency had slipped to the 92 mark against the greenback.
Recent Volatility and Market Factors
Earlier on Friday, the rupee had touched an all-time low of 92.02 before recovering to close 6 paise higher at 91.93. The currency faced pressure from a firm US dollar and lingering geopolitical concerns throughout the previous week. Forex traders noted that subdued domestic equities also limited gains, negatively impacting investor sentiment.
At the interbank foreign exchange market, the rupee initially strengthened to 91.82 from an opening level of 91.89, before dipping to its record low of 92.02. Thursday had seen the rupee finish flat at 91.99, after previously touching 92 per dollar on January 23.
Budget Impact and Expert Analysis
According to Amit Pabari, Managing Director of CR Forex Advisors, "Union Budget 2026 did not arrive with fireworks. Instead, it stayed firmly on the path of continuity — focusing on growth, stability, and fiscal discipline." He added that while short-term pressure may persist, the broader message of fiscal credibility and growth continuity keeps medium-term prospects constructive for the currency.
Forex Reserves Reach Record High
In a significant development, Reserve Bank of India data revealed that the country's forex reserves climbed by $8.053 billion to reach an all-time high of $709.413 billion for the week ended January 23. This followed an even larger jump of $14.167 billion in the previous week, indicating strong reserve accumulation.
Foreign Investment and Commodity Movements
Foreign institutional investors (FIIs) remained net sellers in the equity markets, offloading shares worth Rs 588.34 crore according to exchange data. Meanwhile, in global commodity markets, Brent crude oil prices slipped 4.24% to $66.38 per barrel in futures trade. This decline came as talks between the United States and Iran focused on avoiding American strikes on Iranian territory. The commodity had earlier spiked to $72 per barrel over the weekend amid concerns of a possible US attack.
The rupee's performance continues to be influenced by multiple factors including domestic economic policies, global geopolitical developments, foreign investment flows, and commodity price movements, particularly in the oil market which significantly impacts India's import bill.
