Rupee extends recovery amid RBI measures, gains 1.8% in two sessions
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The rupee appreciated 82 paise to ₹94.96 against the US dollar in early trade on Tuesday, extending its recovery for a second consecutive session after the Reserve Bank of India (RBI) announced measures to contain volatility in the foreign-exchange market.
The currency has gained around 1.8% from Friday’s close of ₹96.73. Its October-to-date appreciation stands at approximately 1.4%, compared with the October 1 closing rate of ₹96.325. However, the rupee remains around 5.5% weaker than its end-2025 reference level of ₹89.98, indicating that the recent rebound has yet to reverse its broader annual decline.
Oil companies' dollar demand in focus
The RBI has opened a special dollar window for three state-run oil marketing companies—Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL)—to meet their daily dollar requirements through designated banks, reducing their reliance on the spot market.
The arrangement could divert an estimated $10 billion–$12 billion in monthly dollar demand away from the spot market, according to industry estimates based on oil import requirements. The move comes amid elevated crude oil prices, which have increased India's dollar requirements for energy imports.
RBI tightens foreign-exchange rules
The central bank has also barred the rebooking of cancelled rupee-linked foreign-exchange derivative contracts and reduced the threshold for specified transactions without underlying exposure from $100 million to $5 million.
While the RBI's intervention may help moderate short-term volatility, sustained gains will depend on whether dollar demand eases and broader external conditions become more supportive of the domestic currency, as per economists.