Rupee jumps 47 paise to close at 92.59 against dollar on easing Iran tensions, RBI holds rate

The Indian rupee appreciated by 47 paise to close at 92.59 (provisional) against the U.S. dollar on Wednesday, supported by easing geopolitical tensions after Donald Trump announced a two-week suspension of military strikes against Iran, and as the Reserve Bank of India (RBI) kept its key benchmark rate unchanged with a neutral stance. 

At the interbank foreign exchange market, the rupee opened at 92.92 against the dollar and strengthened to an intraday high of 92.56 before settling at 92.59, marking a sharp recovery from Tuesday’s close of 93.06, when it had declined by 16 paise. 

Investor sentiment improved 

Forex traders said investor sentiment improved after RBI Governor Sanjay Malhotra clarified that recent forex-related measures do not signal any structural shift in policy. 

Malhotra also expressed confidence in the resilience of the banking system, saying that supervisory inspections of HDFC Bank did not reveal any governance or conduct-related concerns, despite recent developments involving some private lenders. 

The central bank’s six-member Monetary Policy Committee unanimously voted to retain the benchmark repo rate at 5.25%, adopting a wait-and-watch approach amid heightened uncertainty stemming from the six-week West Asia conflict, which has impacted energy prices, inflation, and global trade flows. 

Meanwhile, the dollar index, which measures the greenback against a basket of six currencies, declined 0.96% to 98.90. 

In its bi-annual Monetary Policy Report, the RBI projected crude oil prices to average $85 per barrel and the rupee to hover around 94 per US dollar in FY27. 

Global oil prices ease 

Global oil prices eased after the ceasefire announcement, with Brent crude falling 13.73% to $94.27 per barrel in futures trade. 

Domestic equity markets rallied sharply, with the BSE Sensex surging 2,946.32 points to close at 77,562.90, and the Nifty 50 climbing 873.70 points to settle at 23,997.35. The rally added nearly ₹15 lakh crore to investor wealth, marking a decisive shift in sentiment after weeks of volatility driven by geopolitical conflicts.

However, foreign institutional investors remained net sellers, offloading equities worth ₹8,692.11 crore on Tuesday, according to exchange data.