Rupee Gains 40 Paise To 95.38, RBI Measures Fuel Third Straight Rise

Mumbai: The Indian rupee strengthened for a third consecutive session on October 13, gaining 40 paise to close provisionally at 95.38 against the US dollar as Reserve Bank of India measures supported the currency.

The rupee opened at 95.53 and traded between 94.96 and 95.53 during the session. It pared some intraday gains but finished above Monday’s closing level of 95.78.

Over three trading sessions, the currency has appreciated by 150 paise. Monday’s 93-paise rise was its biggest single-day gain in more than six months.

RBI Measures Reduce Spot Dollar Demand

Forex traders attributed the recovery to the RBI’s dedicated dollar window for public sector oil marketing companies, operated through designated banks.

The facility redirects refiners’ dollar purchases away from the spot market. Tighter foreign exchange derivative rules and higher costs for certain hedging transactions are also intended to discourage excessive speculative positions.

The RBI additionally introduced a 20 per cent reserve requirement for specified dollar-purchase hedging transactions exceeding $2 million.

Dilip Parmar, senior research analyst at HDFC Securities, said regulatory measures, unwinding of long dollar positions, a softer greenback, lower crude prices and recovering equities helped the rupee advance.

Dollar Weakens as Equities Rally

The dollar index fell 0.26 per cent to 102.32, while Brent crude futures declined 1.93 per cent to $104.59 a barrel.

Domestic equities rallied, with the Sensex rising 1,109.10 points to 73,033.78 and the Nifty gaining 358.60 points to 22,721.95.

However, foreign institutional investors sold Indian equities worth ₹1,708.48 crore on Monday, highlighting continuing external pressure.

Currency Outlook Remains Cautious

Parmar identified support for USD/INR at 95.00. A sustained decline below that level could take the pair towards 94.50, although external macroeconomic challenges may limit further rupee gains.

Finance Minister Nirmala Sitharaman said the RBI would continue curbing excessive currency volatility. She attributed much of the instability to external challenges while stressing the government’s focus on maintaining sound domestic macroeconomic fundamentals.