The rupee strengthened for the second consecutive session on Friday, closing at a provisional rate of 95.73 against the US dollar, bolstered by falling crude oil prices and potential intervention by the Reserve Bank of India (RBI).
Forex traders noted that market confidence improved following remarks from US Secretary of State Marco Rubio, which suggested that diplomatic discussions concerning Iran were progressing constructively. Additionally, positive performance in domestic equities and a decrease in US Treasury yields contributed to the rupee’s gains.
At the interbank foreign exchange market, the rupee started the day at 96.30 against the dollar, reaching an intraday high of 95.30 and dipping to a low of 95.68 during trading. By the end of Friday’s session, the rupee had risen by 63 paise from its previous close, where it had settled at 96.36 after bouncing back 50 paise from an all-time low.
Market analysts express a cautious outlook for the rupee, suggesting it may face downward pressure due to uncertainties surrounding US-Iran relations. “We expect the rupee to trade with a negative bias given the geopolitical tensions, but optimism surrounding peace efforts and lower crude prices may provide some support at lower levels,” stated Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan. He further projected that the USD-INR exchange rate could fluctuate between 95.50 and 96.30.
Sahil Kapoor, Head of Products and Market Strategist at SVP, DSP Mutual Fund, advised investors to purchase rupee-denominated assets, emphasizing that currencies, interest rates, and capital flows operate cyclically. “Betting against the rupee at these depressed Real Effective Exchange Rate (REER) levels and tight inflation differentials is a low-probability trade. Data suggests it’s time to allocate towards rupee-denominated equities and bonds,” he remarked.
In related developments, the dollar index, which measures the US dollar’s strength against a basket of six currencies, was trading at 99.29, reflecting a slight decline of 0.04 percent. Brent crude oil prices, however, were on the rise, increasing by 2.18 percent to USD 104.82 per barrel in futures markets.
On the domestic stock market, the Sensex rose by 231.99 points to close at 75,415.35, while the Nifty index increased by 64.60 points to settle at 23,719.30. Despite the rupee’s recovery, Foreign Institutional Investors sold equities worth Rs 1,891.21 crore on a net basis on Thursday, according to exchange data.
In response to the ongoing economic challenges, Commerce and Industry Minister Piyush Goyal announced that the government is contemplating multiple measures to address the widening Current Account Deficit (CAD) amid a weakening rupee and an increasing trade deficit.
Published on May 22, 2026
