The Indian rupee gained 12 paise from its all-time closing low, settling at 88.68 (provisional) against the US dollar on Wednesday following the Reserve Bank of India’s (RBI) monetary policy announcement. This announcement included a series of measures designed to support exporters and stabilize the domestic currency.
Forex traders observed that the rupee’s appreciation was influenced by the RBI’s decision to keep the repo rate unchanged at 5.5 percent and maintain a neutral stance in its fourth Monetary Policy announcement for FY26. Additional factors contributing to the rupee’s performance included strength in domestic markets and a decline in crude oil prices.
During trading on the interbank foreign exchange, the rupee opened at 88.79 against the dollar, reached an intraday high of 88.65, and ultimately settled at 88.68, which represented an increase of 12 paise from the previous day’s close. On Tuesday, the rupee had decreased by 5 paise to an all-time low of 88.80 against the US dollar.
Research Analyst Anuj Choudhary from Mirae Asset ShareKhan noted, “We expect the rupee to strengthen further as the monetary policy decision, along with a series of measures to support exporters, may bring stability to the currency. Strength in domestic markets and a weakened US dollar could also bolster the rupee.”
Meanwhile, the dollar index, which measures the strength of the dollar against a basket of six currencies, was trading at 97.75, down by 0.02 percent amid a US government shutdown. Choudhary added that “the US dollar fell due to the government shutdown and disappointing consumer sentiment data,” highlighting that US consumer sentiment had unexpectedly dropped to 94.2 compared to a forecast of 96.
In the commodities market, Brent crude oil prices were trading 0.74 percent lower at $65.54 per barrel in futures trade. Choudhary indicated that falling global crude prices might also support the Indian rupee, although foreign institutional investor (FII) outflows and ongoing issues around US visa fee hikes might limit potential gains. He projected that the USDINR spot price could trade within a range of 88.35 to 88.90.
On the domestic equity front, the Sensex increased by 715.69 points, settling at 80,983.31, while the Nifty rose by 225.20 points to 24,836.30. Data indicated that foreign institutional investors sold equities valued at ₹2,327.09 crore on Tuesday.
In the backdrop of these developments, the RBI maintained its key interest rates, awaiting greater clarity regarding the impact of US tariffs and the outcomes of previous rate cuts and recent tax adjustments. However, RBI Governor Sanjay Malhotra hinted at the possibility of easing in the coming months to support the economy amid potential impacts from US tariffs.
Published on October 1, 2025.
