Rupee Ends Stronger Against Dollar As RBI Intervenes
Traders familiar with the development noted that the Reserve Bank of India has been heavily intervening in the market both yesterday and today.
The rupee closes stronger against the US dollar on Tuesday. The domestic currency strengthened by 65 paise to close at 86.83 against the US dollar.
It earlier gained 13 paise against the US dollar to open at 87.35 on Tuesday. This recovery followed a significant weakening on Monday, when the rupee reached 87.92 against the dollar due to fresh threats of tariffs on steel and aluminium imports. The US administration’s announcement of a 25% tariff on these imports, along with hints of further action on other goods, had triggered a flight to safety, boosting the dollar. The rupee-dollar pair closed the volatile trade at 87.48 per dollar on Monday.
On Tuesday, the domestic currency strengthened against the US dollar as the central bank stepped in to stabilise the currency, traders told NDTV Profit. The domestic currency sustained its gains from the open, moving away from the 87-mark as the day progressed. Traders familiar with the development noted that the Reserve Bank of India has been heavily intervening in the market both yesterday and today.
In recent sessions, there was significant speculation that the rupee might touch 90 against the US dollar. In response, the RBI stepped in to control the volatility, signalling to the market that while some level of speculation is tolerated, they will not allow the rupee to depreciate too quickly, traders said.
“The rupee weakened to 87.95 against the dollar before closing at 87.4750. However, the unit managed to pare most of its losses due to strong central bank intervention, exporters selling dollars, and profit-booking by speculators who were holding long rupee-dollar positions,” said Kunal Sodhani of Shinhan Bank.
Meanwhile, Chief Economic Advisor V. Anantha Nageswaran said that the rupee’s depreciation has not hindered India from providing returns to investors. Speaking at the IVCA Conclave 2025, Nageswaran noted that the rupee’s annual depreciation has historically been around 3%. He suggested that if India maintains an inflation rate of around 3–4%, the decline might slow down significantly. He also pointed out that the rupee’s depreciation is a direct consequence of the dollar’s strength.
