How is the Indian Rupee Recovering Amid RBI Support and Trade Optimism?
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Synopsis
On October 15, the Indian rupee experienced a remarkable recovery, showcasing the strongest single-day rise in almost four months. This surge is attributed to the Reserve Bank of India's intervention and growing optimism surrounding trade talks with the United States. Could this signify a turning point for the rupee?
Key Takeaways
- The Indian rupee saw its biggest rise in four months, climbing 0.9% to 87.9987 against the US dollar.
- Intervention by the RBI was significant in stabilizing the currency.
- Positive sentiment surrounding trade talks with the US boosted the rupee.
- Analysts project support for the rupee at 88.50 and resistance at 89.10.
- The Indian equity market also showed positive momentum following the rupee's recovery.
Mumbai, Oct 15 (NationPress) The Indian rupee experienced its most significant single-day surge in almost four months on Wednesday, recovering from near historic lows, likely due to intervention from the Reserve Bank of India (RBI) and a resurgence of optimism regarding the India-US trade negotiations.
The domestic currency rose by up to 0.9 percent to 87.9987 against the US dollar during the session—marking its largest intraday increase since June 24—before slightly scaling back some of those gains. On Tuesday, the rupee had dropped to 88.8025 per dollar, nearing its all-time record low.
Market participants linked the rebound to substantial dollar sales orchestrated by the RBI in both onshore and offshore markets. Furthermore, the central bank has intervened to stabilize the currency, which has remained mostly range-bound recently as it aimed to defend the 89-per-dollar threshold.
Additionally, positive sentiment was lifted by reports indicating that India is hastening its efforts to finalize trade discussions with the United States by next month.
The potential for a deal, combined with a softer dollar amid expectations of US Federal Reserve rate cuts, bolstered the rupee and other Asian currencies.
Dilip Parmar, a senior research analyst at HDFC Securities, noted that the rupee has shown resilience, consolidating within a narrow range over the past fortnight due to central bank actions and foreign fund inflows. In the near term, spot USD/INR is expected to find support at 88.50 and faces resistance at 89.10, he added.
Meanwhile, Indian equity indices surged nearly one percent on Wednesday after a decline the previous day. Around 1:32 PM, the Sensex was trading at 82,672, up 642 points or 0.8 percent, while Nifty was 205 points or 0.82 percent higher at 25,352.40.
This morning, Indian stock markets opened positively, taking cues from the optimistic global sentiment. Early trading saw buying across most sectors, with significant activity in major companies like Bajaj Finserv, Bajaj Finance, NTPC, L&T, Power Grid, BEL, Bharti Airtel, Trent, and Asian Paints.
Point of View
It's crucial to recognize the resilience shown by the Indian rupee amid global economic fluctuations. The RBI's decisive actions, combined with favorable trade negotiations, are pivotal in stabilizing our currency. We remain committed to presenting an unbiased viewpoint as the situation evolves, ensuring that our coverage reflects the interests of our readers while upholding the principles of trust and reliability.
NationPress
15/10/2025
Frequently Asked Questions
What caused the rupee's recent recovery?
The rupee's recent recovery is primarily attributed to the Reserve Bank of India's intervention in the forex market and positive sentiment surrounding ongoing trade negotiations with the United States. These factors have contributed to a rebound from near-record lows.
What is the current exchange rate of the rupee?
As of the latest session, the Indian rupee traded at approximately 87.9987 against the US dollar, marking a significant increase from its previous low of 88.8025.
How have Indian equity markets responded?
Indian equity indices rallied nearly one percent following the rupee's recovery, indicating positive market sentiment and investor confidence in the Indian economy.
What is the outlook for the rupee moving forward?
Market analysts suggest that the rupee may find support at 88.50 and face resistance at 89.10, with ongoing central bank interventions and foreign investments playing a crucial role in its performance.
What impact do US Federal Reserve rate cuts have on the rupee?
Expectations of US Federal Reserve rate cuts have led to a softer dollar, which in turn supports the Indian rupee and other Asian currencies, creating a favorable environment for currency recovery.
