Rupee Gains 44 Paise To 94.92, RBI Measures Extend Currency Recovery

Mumbai: The Indian rupee appreciated 44 paise to 94.92 against the US dollar in early trading on October 14, extending its recovery as Reserve Bank of India measures eased dollar demand and discouraged speculative currency positions.

The rupee opened at 95.05 before strengthening to 94.92 at the interbank foreign exchange market. On Tuesday, it gained 42 paise to close at 95.36, marking its third consecutive session of appreciation.

Forex traders said the currency’s recovery was driven by regulatory intervention rather than an improvement in external conditions.

RBI Forex Measures Support Recovery

The central bank introduced a special dollar window for public sector oil marketing companies, shifting their foreign currency purchases away from the spot market.

It also tightened rules governing rupee-linked foreign exchange derivatives to curb speculative bets against the domestic currency.

A 20 per cent reserve requirement applies to specified dollar-purchase hedging transactions exceeding $2 million, increasing costs for certain foreign exchange exposures.

Together, these measures seek to reduce immediate spot dollar demand and strengthen discipline in the currency market.

Rupee Outlook and External Pressures

Traders said a sustained move below 95.00 for USD/INR could open the way towards 94.50. However, external macroeconomic pressures may restrict further appreciation.

Finance Minister Nirmala Sitharaman said the rupee had weakened significantly over the past year and a half. She reiterated that the RBI would work to prevent excessive volatility.

The minister attributed much of the instability to external challenges while emphasising the government’s efforts to maintain sound domestic economic fundamentals.

Crude Oil Rises as Dollar Softens

The dollar index declined 0.06 per cent to 102.11. Brent crude futures rose 0.57 per cent to $106.29 a barrel, keeping energy costs elevated.

Indian equities initially weakened, with Sensex at 73,000.82 and Nifty at 22,688.75.

Foreign institutional investors sold equities worth ₹1,305.13 crore on Tuesday, according to exchange data, leaving overseas outflows among the pressures facing domestic financial markets.