Rupee rebounds 45 Paise from record low as RBI support and Equity rally lift sentiment

The Indian rupee rebounded on Thursday, gaining 45 paise to close at 91.60 against the US dollar (provisional) , supported by a strong recovery in domestic equity markets and reports of intervention by the Reserve Bank of India (RBI). The local currency had plunged to a record low in the previous session.

At the interbank foreign exchange market, the rupee opened weaker at 92.16 against the greenback but recovered during the session to touch an intra-day high of 91.30 before settling at 91.60 , up from Wednesday’s close of 92.05 . The currency had slumped 56 paise on Wednesday to mark its all-time low, following a 41-paise decline on Monday . The forex market remained closed on Tuesday on account of Holi.

Forex analysts attributed the rebound largely to suspected intervention by the RBI, which appears to have stepped in to curb excessive volatility in the currency market amid global geopolitical tensions.

Anuj Choudhary , Research Analyst at Mirae Asset Sharekhan, said the rupee recovered from record low levels on the back of central bank support and a positive trend in domestic equities. However, he noted that gains were limited by a strong US dollar and rising crude oil prices. “Foreign institutional investor outflows and higher crude oil prices may continue to weigh on the rupee. However, RBI intervention could provide support at lower levels,” he said, adding that the USD-INR spot rate may trade between 91.30 and 92.10 in the near term .

Global factors also continued to exert pressure on the local currency. The dollar index , which measures the greenback against a basket of six major currencies, was trading 0.13 per cent higher at 98.86 . Meanwhile, Brent crude futures rose 1.83 per cent to $82.89 per barrel amid escalating tensions in the Middle East and fears of potential disruptions to oil shipments through the Strait of Hormuz.

India, which imports nearly 85 per cent of its crude oil requirements , remains vulnerable to rising global oil prices, which could widen the country’s import bill and weigh on the rupee.

On the domestic equity front, markets staged a sharp rebound, with the Sensex jumping 899.71 points, or 1.14 per cent, to settle at 80,015.90 , while the Nifty climbed 285.40 points, or 1.17 per cent, to 24,765.90 .

However, persistent foreign fund outflows continued to remain a concern. According to exchange data, foreign institutional investors sold equities worth ₹8,752.65 crore on a net basis on Wednesday .