Indian Rupee Hits 1-Month High

The Indian rupee strengthened to around 92.6 per dollar, extending gains for a second session to a month-high, supported by plunging oil prices and a broad rally in Asian currencies following a two-week Middle East ceasefire. The agreement, reached by Donald Trump less than two hours before a self-imposed deadline to reopen the Strait of Hormuz, eased geopolitical uncertainty and boosted risk assets while helping to normalize energy flows and shipping activity. Ahead of the Reserve Bank of India’s policy announcement later today, the rupee also benefited from earlier measures tightening bank and corporate foreign exchange activity, alongside falling US Treasury yields and a softer dollar. Further supporting sentiment, India and New Zealand are expected to sign a Free Trade Agreement on April 24, which could provide tariff-free access for Indian goods in the New Zealand market and attract up to USD 20 billion in investment over the next 15 years.

The Indian rupee hovered near 93 per dollar, trading in a narrow range as central bank–led unwinding of arbitrage positions provided support ahead of the upcoming policy decision. The currency has recovered from levels near 95 amid easing uncertainty over Reserve Bank of India policy measures, with ongoing bank position adjustments expected to sustain near-term stability. However, gains were limited as markets remained on edge over geopolitical tensions. Heightened rhetoric from Donald Trump fueled concerns of a potential escalation with Iran, with warnings of severe consequences if a deal over key transit routes is not reached. Over the past year, the rupee has depreciated 8.2%, and efforts to defend the currency have led to a $40 billion drawdown in foreign-exchange reserves over the last four weeks. Market participants are now eyeing the RBI’s policy decision on April 8 for further guidance on interest rates and liquidity.

The Indian rupee steadied around 92.9 per USD, holding its recent gains in thin holiday trading, but headed for a sharp weekly rise amid tighter measures by the central bank to curb speculative bets. The rally has been underpinned by a series of Reserve Bank actions to restrict speculative FX trading, including curbs on forward transactions and tighter limits on banks’ foreign exchange positions. These steps have triggered dollar selling in the onshore market and helped support the rupee, while also tightening hedging conditions and widening gaps with offshore pricing. Elsewhere, hopes that the Strait of Hormuz would partially reopen supported sentiment. Iran and Oman are said to be developing a protocol to “monitor transit” through the strategic waterway, a move aimed at easing regional tensions. India and other countries are also actively negotiating with Tehran to ensure the safe passage of vessels, while also forming small diplomatic circles and exploring barter-style agreements.