Rupee Rises on Dollar Weakness

2026-08-20 03:53 By Mariene Camarillo 1 min. read

The Indian rupee strengthened to around 95.62 per dollar, after a three-week low as the weaker dollar and US Treasury yields supported the currency.

The dollar index fell 0.88% on Wednesday, its biggest drop since mid-March, after the US Treasury planned to double liquidity-support buybacks for longer-dated bonds to at least $4 billion per operation, easing pressure in the US bond market.

However, the rupee's recovery is likely to remain limited as Brent crude hovers near $92 a barrel, as markets assess the US-Iran conflict and shipping disruption through the Strait of Hormuz.

Meanwhile, RBI Governor Sanjay Malhotra said the central bank's net short forward-dollar position remains “very manageable,” as the RBI expects at least $80 billion in inflows from FCNR(B) deposits and foreign-currency borrowing.

He said intervention will focus on curbing volatility and speculation, while the earlier FCNR(B) swap closure reflected stronger inflows and rising sterilisation costs.



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Rupee Rises on Dollar Weakness
The Indian rupee strengthened to around 95.62 per dollar, after a three-week low as the weaker dollar and US Treasury yields supported the currency. The dollar index fell 0.88% on Wednesday, its biggest drop since mid-March, after the US Treasury planned to double liquidity-support buybacks for longer-dated bonds to at least $4 billion per operation, easing pressure in the US bond market. However, the rupee's recovery is likely to remain limited as Brent crude hovers near $92 a barrel, as markets assess the US-Iran conflict and shipping disruption through the Strait of Hormuz. Meanwhile, RBI Governor Sanjay Malhotra said the central bank's net short forward-dollar position remains “very manageable,” as the RBI expects at least $80 billion in inflows from FCNR(B) deposits and foreign-currency borrowing. He said intervention will focus on curbing volatility and speculation, while the earlier FCNR(B) swap closure reflected stronger inflows and rising sterilisation costs.
2026-08-20
Rupee Falls to Three-Week Low on Oil
The Indian rupee hovered around 95.74 per dollar, extending losses for a third consecutive session to a three-week low as higher oil prices, elevated US Treasury yields, and a risk-off mood weighed on the currency. Brent crude neared $92 a barrel, rising for a fourth straight day amid uncertainty over the Strait of Hormuz, while the 30-year US Treasury yield climbed to its highest level since 2007, further dampening risk appetite. The rupee also remained under pressure after the RBI brought forward by a month the deadline for its discounted foreign-currency swap facility for non-resident Indian deposits, souring near-term sentiment. Meanwhile, strong underlying dollar demand continued to weigh on the currency, although daily RBI intervention through dollar sales helped limit the decline and cap volatility.
2026-08-17
Rupee Edges Higher on Oil Pullback
The Indian rupee hovered around 95.4 per dollar, edging higher after steadying in the previous session as a pullback in oil prices offered some relief. Brent crude fell more than 2% on Thursday to around $86.50 a barrel, despite a US threat to maintain a naval blockade of Iranian ports indefinitely. However, persistent dollar demand from importers and maturities in the non-deliverable forward market continued to weigh on the rupee, while near-daily intervention by the Reserve Bank of India helped cushion its decline. Meanwhile, market participants assessed the RBI's proposed loan interest-rate framework, which could provide longer-term support by strengthening monetary-policy transmission and improving pricing transparency. The rules would link floating-rate personal and MSME loans to external benchmarks, including the RBI's repo rate, but would take effect only from April 2027 if finalized.
2026-08-12