The Indian rupee recovered by 16 paise in early trading on Wednesday, reaching 95.52 against the US dollar, following optimism regarding reduced demand for the American currency due to recent import restrictions. Forex traders noted that expectations of resilience in the dollar-rupee pair were driven by a decrease in demand from gold importers.
In a bid to alleviate pressure on the country’s foreign exchange reserves, the Indian government has raised import tariffs on gold and silver from 6 percent to 15 percent. This move aims to curb overseas purchases of these precious metals, which are in high demand, particularly given India’s status as the world’s second-largest consumer of gold.
Despite this rebound, concerns remain regarding high crude oil prices and the dollar’s overall strength in the international market, which are affecting investor sentiment. On the interbank foreign exchange market, the rupee opened at 95.52, reflecting a slight gain from its previous record low.
On Tuesday, the rupee had closed at an all-time low of 95.68, depreciating by 40 paise. Analysts suggest that the increase in gold import tariffs could lead to a reduction in demand for the metal in India, which could help mitigate the country’s current account deficit (CAD) and offer some support to the rupee.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, stated, “The move will also help in curbing the CAD and help the rupee to some extent.”
In a related appeal, Prime Minister Modi has urged citizens to refrain from purchasing gold for a year to help safeguard foreign exchange, as India relies heavily on imports for most of its precious commodities.
Meanwhile, the dollar index, which tracks the currency’s performance against a basket of six currencies, was trading at 98.30, up by 0.01 percent. Brent crude, the global oil benchmark, saw a decrease of 1.12 percent, priced at $106.56 per barrel in futures trading.
On the domestic equities front, markets showed signs of recovery in early trading, with the 30-share Sensex gaining 75.64 points to reach 74,614.51, while the Nifty rose by 17.10 points to 23,391.10.
However, Foreign Institutional Investors offloaded equities worth Rs 1,959.39 crore on Tuesday, according to exchange data.
On the macroeconomic front, retail inflation rose to 3.48 percent in April, primarily driven by increased prices of gold and silver jewelry, alongside certain kitchen staples, as per government data released on Tuesday. The Consumer Price Index (CPI)-based inflation was recorded at 3.40 percent in March, 3.21 percent in February, and 2.74 percent in January.
Furthermore, the National Statistics Office (NSO) reported that inflation in the food basket climbed to 4.20 percent in April, up from 3.87 percent the previous month.
Published on May 13, 2026.
