The Indian Rupee has made a notable recovery in the early months of the new financial year, gaining approximately 191 paise against the US dollar. This rebound follows actions by the Reserve Bank of India (RBI) aimed at mitigating depreciation pressures triggered by the US-Israel strikes against Iran on February 28, 2026.
As of last Friday, the Rupee strengthened by about 28 paise, closing at 92.9250 per dollar, compared to the prior closing of 93.20. Overall, it has gained 81 paise since the previous Friday’s close of 93.73. In comparison to March 30, 2026, when the Rupee reached closing and intraday lows of 94.83 and 95.21 respectively, it has substantially improved in 10 trading sessions during April 2026.
The Rupee had declined approximately 10 percent in FY26 against the dollar, making it one of the worst-performing currencies among Asian and Emerging Market Economies. However, it has turned around in the current financial year, appreciating by about 2 percent, facilitated by the central bank’s measures to curb speculation and arbitrage.
While the Indian Rupee has made gains, three other Emerging Market Economy (EME) currencies, namely the Hungarian Forint, Russian Ruble, and Chilean Peso, appreciated significantly more, by 9 percent, 7.1 percent, and 5.6 percent, respectively.
The RBI implemented several measures to stabilize the Rupee, including limiting offshore Non-Deliverable Forward participation by Indian banks, thereby shifting price discovery onshore. Additionally, it imposed caps on net open positions at approximately $100 million, compelling banks to reduce excess dollar holdings and enhance Rupee liquidity. The central bank further restricted the rebooking of canceled foreign exchange derivative contracts involving the Rupee and advised oil marketing companies to utilize a special credit line for their foreign exchange needs.
Amit Pabari, Managing Director of CR Forex Advisors, highlighted that since the escalation of the US-Iran conflict on February 28, 2026, the Indian Rupee has undergone a significant crisis-to-recovery transition. He noted, “Following the escalation of the US–Iran conflict, the INR came under significant pressure, depreciating nearly 4.5% and breaching the 95 level. The move was driven by heightened global risk aversion, elevated crude oil prices, and a broadly stronger US dollar.”
Pabari further explained that the subsequent phase of stabilization in March saw the Rupee trading with high volatility, eventually finding a base between 92.00 and 93.50. Over this period, the currency appreciated by roughly 0.70%. He assessed that the Rupee’s strengthening below 93 seems to have stemmed not only from improved sentiment but also from proactive policy interventions beyond mere spot dollar selling, indicating that its rise was not entirely market-driven.
V. Rama Chandra Reddy, Head of Treasury at Karur Vysya Bank, pointed out that while the Rupee’s recovery can be attributed to the RBI’s interventions, challenges remain. These include concerns about the widening current account deficit, continuous foreign portfolio investor (FPI) selling in equity markets, and rising crude oil prices. He cautioned, “When crude oil and commodity prices go up, demand for the dollar will increase. Remittances may decline due to the impact of the West Asia war. These are the challenges for the Rupee to sustain this appreciation.”
Reddy noted that once the conflict concludes, there may be a return of risk appetite in Indian financial markets, potentially prompting FPIs to view Indian equities and debt investments more favorably, along with increased foreign direct investment (FDI).
Published on April 17, 2026.
