Rupee Gains 19 Paise to Settle at 95.80 Against US Dollar as RBI Swap Intervention Offsets Pressures

The Indian rupee appreciated by 19 paise to end at 95.80 against the US dollar, staging a crucial recovery to remain firmly above the psychologically vital 96 level. The rebound came after heavy pressure earlier in the week, aided by substantial market interventions from the Reserve Bank of India (RBI)—including dollar sales and a multi-billion sell-buy swap push—alongside moderating international crude oil benchmarks.

The domestic currency had opened the week at 95.86 against the greenback and experienced volatile fluctuations within a 95.57 to 95.9550 band. After touching a mid-week low of 95.9550 on Thursday amid persistent foreign capital outflows, the local unit recouped losses during Friday's session, opening at 95.92 and touching an intraday trough of 95.94 before central bank liquidity actions and exporter dollar sales propelled it back to 95.80.

RBI Liquidity Support and Macro Crosscurrents

To shield the rupee against steep depreciation and reserve depletion, the RBI deployed spot market interventions and a concerted $10 billion foreign exchange swap strategy to balance domestic liquidity and forward premia.

The currency gained further respite from softening energy markets:

• Brent crude prices pulled back below the $106 per barrel mark on emerging reports of potential diplomatic negotiations between the United States and Iran regarding passage through the Strait of Hormuz.
• The US Dollar Index remained elevated around 101, underpinned by hawkish commentary from the US Federal Reserve and elevated US Treasury yields.
• Importer demand for dollars remained steady, though central bank liquidity measures helped mitigate sudden spillover into spot exchange rates.

Impact on Domestic Equity Markets

The stabilisation of the domestic currency provided relief to equity benchmarks, which halted their recent slide to close modestly higher on selective value buying. The BSE Sensex rose 315.20 points (0.43%) to finish at 73,895.74, while the NSE Nifty 50 climbed 77.40 points (0.34%) to end at 23,140.50.

Sectoral Performance Highlights:

• Top performers on the benchmark index included Axis Bank, Mahindra & Mahindra, and Asian Paints, drawing support from easing commodity prices.
• Heavyweights in export-facing sectors such as Infosys, along with Max Healthcare and Tata Motors PV, faced persistent selling pressure.
• Banking, realty, and metal counters recorded steady institutional buying as sovereign debt market yields stabilized.

Outlook for Market Participants

Forex market analysts note that while the RBI's aggressive liquidity and swap management has created an effective floor near 96.00, the rupee's medium-term trajectory remains heavily tied to crude oil price dynamics and broader emerging market capital flows. For domestic retail and institutional investors, the containment of currency volatility provides immediate support to headline inflation projections, even as global bond yields and geopolitical developments will require close monitoring in the weeks ahead.

Tags: Reserve Bank of India USDINR NSE Nifty 50 BSE Sensex crude oil foreign exchange