The Indian rupee appreciated by 35 paise, closing at 95.25 (provisional) against the US dollar on Monday, marking its third consecutive session of gains. This upward movement comes amid growing optimism regarding a potential peace agreement between the US and Iran, despite ongoing disputes, including those related to blockades in the Strait of Hormuz.
Forex traders noted that this gain followed comments from Reserve Bank of India (RBI) Governor Sanjay Malhotra, who stated in a media interaction that the central bank would take necessary measures to ensure orderly price discovery in the foreign exchange market.
During an interview with Mint, Malhotra asserted that the Indian rupee is not overvalued and may indeed be undervalued following its recent depreciation. In the interbank foreign exchange market, the rupee opened at 95.36 against the US dollar, reaching an intraday high of 95.12 and a low of 95.44 before closing at 95.25, up 35 paise from the previous day’s close.
On the prior trading day, Friday, the rupee increased by 75 paise to close at 95.60 against the US dollar.
Traders noted that the rupee’s positive performance was also influenced by US President Donald Trump, who indicated that the US and Iran have “largely negotiated” a peace deal aimed at ending the ongoing conflict. He emphasized caution, stating that negotiators should “not rush into a deal” and that both parties need to take their time to finalize the terms correctly. Additionally, US Secretary of State Marco Rubio mentioned that the US and India were nearing a preliminary trade agreement.
In other market indicators, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading lower at 99.98, down by 0.26 percent. Brent crude, the global oil benchmark, fell by 5.10 percent, trading at USD 98.26 per barrel in futures.
On the domestic front, the equity markets saw a significant rally, with the Sensex gaining 1,073.61 points to settle at 76,488.96 and the Nifty increasing by 312.40 points to reach 24,031.70.
However, foreign institutional investors sold equities worth Rs 4,440.47 crore on a net basis on Friday, as per exchange data. Furthermore, the Reserve Bank of India reported that the country’s forex reserves declined by USD 8.094 billion to USD 688.894 billion for the week ending May 15, following an increase of USD 6.295 billion to USD 696.988 billion the previous week.
Published on May 25, 2026.
