Rupee Rebounds as Banks Cut Dollar Bets

The Indian rupee strengthened to around 93.9 per dollar, rebounding sharply after hitting record lows as authorities stepped in to contain pressure on the currency. The gains followed the Reserve Bank of India’s announcement of new limits on banks’ foreign-exchange exposure, capping onshore open positions at $100 million per day, effective April 10. The measure compels lenders to scale back large positions and curbs their ability to build aggressive one-sided bets against the rupee. The intervention comes as the rupee has declined more than 4% over the past month, falling to around 94.82 per dollar. Earlier interventions to stabilize the currency have already contributed to a drop of over $30 billion in foreign-exchange reserves in the first three weeks of March, limiting the central bank’s flexibility for further direct action.

The Indian rupee fell to around 94.4 per dollar, hitting a record low, as mixed signals on Middle East diplomacy left investors uncertain. A temporary easing of risks came with Washington extending its pause on strikes against energy infrastructure by 10 days until early April, slightly stabilizing oil markets, though markets remain wary amid ongoing tensions. Markets also factored in expectations that the Reserve Bank of India would keep its key repo rate steady at 5.25% on April 8 and maintain this stance at least until mid-2027. Losses were partially limited after Iran allowed India and several other “friendly nations” to continue using the strategic Strait of Hormuz for commercial shipping, easing concerns over potential LPG and petrol supply disruptions.

The Indian rupee hovered just below 94 per dollar, steadying near record low levels, as oil prices pulled back on reports of a US ceasefire proposal to Iran. The move lifted risk sentiment around the Middle East conflict and tempered safe-haven demand for the dollar. However, gains remained limited as persistent foreign portfolio outflows and upcoming non-deliverable forward (NDF) and fiscal-year-end maturities continued to generate strong dollar demand. India’s reliance on oil imports, along with lingering concerns over damaged Gulf energy infrastructure, kept underlying pressures elevated, while Reserve Bank of India intervention after earlier support of $16–18 billion left the rupee more exposed to external shocks. Investors continue to watch crude price swings, foreign flows, and geopolitical developments. The market is closed today for Ram Navami and is set to reopen tomorrow, Friday.