Whalesbook
The Indian rupee ended the week as Asia's top performer, recovering from earlier dips that brought it near 97 against the dollar. The turnaround is mainly credited to significant intervention by the Reserve Bank of India (RBI) in both spot and forward markets.
RBI Steps In
On Friday, the rupee closed at 95.69 per dollar, a solid gain from 96.20 previously. It appreciated 0.53% on Friday and 1.2% over the last two trading days. Traders estimate the RBI sold between $2 billion and $3 billion on Thursday and Friday, successfully pushing the rupee past 96 per dollar and deterring short-term speculators.
Falling Oil Prices Help
Lower crude oil prices also supported the rupee. Brent crude dropped to around $104 a barrel this week from $112, as geopolitical tensions eased. Hopes for a peace agreement between the United States and Iran improved market sentiment, reducing pressure from imported inflation and dollar demand for oil.
Lingering Long-Term Challenges
Despite the recent rebound, the rupee faces ongoing challenges. It has fallen 10.12% over the past year and 6.08% year-to-date. India's foreign exchange reserves dropped by $8 billion in the week ending May 15 to $688.9 billion, largely due to the central bank's intervention efforts. Total reserves are down about $39 billion from their peak in February 2026.
Analysts note that the spot rupee faces resistance at 96.20 per dollar and support at 95.40 per dollar.