HIGHLIGHTS
• Rupee surged 81 paise to close at 94.93 against the US dollar.
• RBI announced measures to boost foreign capital inflows and forex liquidity.
• Investor sentiment improved following the central bank’s policy decisions.
• RBI retained the repo rate at 5.25% for the second consecutive policy review.
• Monetary Policy Committee maintained a neutral policy stance.
• RBI said India’s forex reserves remain sufficient to absorb external shocks.
• Inflation forecast for FY27 was raised by 50 basis points to 5.1%.
• Markets welcomed the RBI’s balanced approach to growth, inflation.
NEW DELHI: The Indian rupee registered its sharpest single-day gain in recent weeks, appreciating by 81 paise to close at 94.93 (provisional) against the US dollar on Friday. The surge came after the Reserve Bank of India (RBI) announced a series of measures aimed at supporting foreign capital inflows and enhancing foreign exchange liquidity, boosting investor confidence in the domestic currency.
At the interbank foreign exchange market, the rupee opened at 95.72 against the greenback and strengthened steadily throughout the session. It touched an intraday high of 94.89 before settling at 94.93, marking a significant improvement from Thursday’s closing level of 95.74. The domestic currency had gained just 2 paise in the previous session.
Market participants attributed the rally to the RBI’s policy announcements and the central bank’s assurance regarding the country’s external sector resilience. Forex traders noted that investor sentiment improved after the RBI emphasized that India’s foreign exchange reserves remain adequate to cushion the economy against potential global shocks and financial market volatility.
In its second bi-monthly monetary policy review for the current fiscal year, the RBI’s Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, unanimously decided to keep the benchmark repo rate unchanged at 5.25 percent. The committee also maintained a neutral policy stance, signaling a balanced approach amid evolving domestic and global economic conditions.
The central bank’s decision comes at a time when policymakers are closely monitoring the impact of rising global energy prices and supply chain disruptions triggered by geopolitical tensions in West Asia. While keeping borrowing costs unchanged, the RBI revised its inflation outlook for FY27 upward by 50 basis points to 5.1 percent, reflecting concerns over imported inflationary pressures and commodity price fluctuations.
Analysts believe the RBI’s twin strategy of maintaining policy stability while strengthening forex liquidity has reassured markets. The measures are expected to encourage foreign investments, support currency stability, and provide additional confidence to investors navigating an uncertain global economic environment.
The rupee’s strong performance underscores growing market optimism that India’s macroeconomic fundamentals and robust foreign exchange reserves will help the economy withstand external challenges in the months ahead.
