The Indian rupee saw a significant strength on Thursday, rising 1.98 per cent from the previous close, which is the biggest single-day jump in 12 years, after fresh steps by the Reserve Bank of India (RBI) aimed at curbing speculative activity boosted sentiment in the currency market.
The rupee climbed to 92.82 against the US dollar, gaining 188 paise compared with its previous close of 94.70 on Monday, as traders anticipated increased dollar supply in the onshore market following the unwinding of speculative positions.
The rupee had advanced as much as 1.8 per cent to 93.17 against the dollar — the most since September 2013 — as currency trading resumed after a two days.
The central bank has intensified efforts to limit arbitrage opportunities and speculative bets that have been weighing on the rupee, even as concerns persist over India’s current account due to elevated oil prices and relatively weak capital flows.
On Wednesday, the RBI tightened norms by restricting banks from offering rupee non-deliverable forwards (NDFs) to both resident and non-resident clients. It also barred companies from rebooking cancelled forward contracts, moves aimed at reducing excessive currency speculation.
However, global risks remain elevated. Crude oil prices surged, with Brent futures rising about 5% to around $106 per barrel, following comments by Donald Trump indicating that the US could strike Iran “extremely hard" in the coming weeks, escalating geopolitical tensions.
Foreign portfolio investors (FPI) offloaded shares worth Rs 8,331 crore on Wednesday, while domestic institutional investors (DII) bought stocks worth Rs 7,172 crore, according to NSE’s provisional data.
On Monday, the Indian currency breached the 95-per-dollar mark in intra-day trade, reflecting sharp pressure following escalation in the Iran conflict that rattled global markets.
