Rupee Logs Highest Close Since Sept 4: Jio IPO Among Three Factors Driving The Gains

On a day when the broader equity market remained under pressure, the Indian currency put up a stellar performance, logging its best close in about six weeks. The rupee beefed up by 46 paise, or 0.48%, to close at 94.45 against the US dollar, according to the provisional data shared after the close of the currency markets on Wednesday.

This is its strongest close since Sept. 4, when the local unit had settled at 94.43. The climb also comes after a one-day blip, when the rupee snapped its six-session winning streak to end 2 paise lower.

The consolidation of rupee comes in the backdrop of a strain seen earlier this month, when the currency had neared record lows and hovered close to the 97 levels.

Here are the three factors that drove the gains on Wednesday.

1. India-US Trade Deal Optimism

Signs that India and the US are close to a trade deal have lifted sentiment. On Tuesday, US President Donald Trump told reporters at the White House that the two countries are close to finalising a deal, after more than a year of negotiations.

His remarks came while US Secretary of State Marco Rubio was in India. Rubio held talks in Mumbai on Tuesday with External Affairs Minister S Jaishankar on trade, energy, technology and defence. Rubio said the deal was close to being finalised, with only a few outstanding issues left. Last week, US Ambassador to India Sergio Gor said most of the major issues had been resolved. Commerce Minister Piyush Goyal has also said the first tranche of the deal is in its final stages.

The deal matters for the rupee. Washington imposed tariffs of up to 50% on most Indian goods in August 2025 after talks broke down. A framework agreed in February cut the rate to 18%, but negotiations stalled after that. Economists have warned that a return to higher tariffs would hurt India's growth outlook and market sentiment and put more pressure on an already weak rupee.

2. Jio IPO Inflows

Foreign money flowing into Jio Platforms Ltd.'s $3.1 billion initial public offering, the largest in India's history, has also lifted the rupee.

'This strength is primarily underpinned by foreign dollar inflows tied to the Jio IPO alongside support from the Reserve Bank of India (RBI). To navigate dollar flows during the IPO allotment process, foreign investors are largely relying on sell/buy swaps—offloading dollars for rupees in the spot market while contracting to repurchase them within a short window, usually under a week," Aamir Makda, commodity and currency analyst at Choice Broking, was quoted as saying by the PTI.

In these trades, investors sell dollars for rupees in the spot market and agree to buy them back within a short window, usually under a week. The spot dollar sales add to the supply of dollars in the market and support the rupee.

ALSO READ: Three Packages, One Year, Rupee Still 4% Weaker: Can RBI's Hedging Curbs Break The Pattern?

3. RBI's Rupee Defence Measures

The Reserve Bank of India's measures announced earlier this month set the stage for the recovery. The central bank rolled out a series of steps to support the rupee, its strongest action since the 2013 currency crisis.

The measures included a dollar window for public sector oil companies, tighter documentation rules, a ban on rebooking cancelled rupee derivative contracts, and a new Foreign Exchange Risk Reserve. Under the reserve, banks must keep non-interest-bearing cash equal to 20% of the rupee notional value of qualifying contracts.

These steps moved some oil-related dollar buying out of the spot market and made certain importer hedges more expensive, while the RBI also intervened directly. RBI Governor Sanjay Malhotra pledged to do whatever is necessary to keep currency moves orderly. He said the central bank had seen significant speculation in currency derivatives.

The impact was immediate. On October 12, the first trading day after the measures, the rupee jumped 93 paise to close at 95.78, its steepest single-day gain in more than six months.

Oil Remains A Headwind

High crude prices remain the biggest risk for the rupee. Brent crude, the global oil benchmark, was trading 1.42% higher at $110.33 per barrel in futures trade.

The dollar index, which tracks the greenback against a basket of six currencies, was trading 0.06% higher at 101.58.

Despite the recent gains, the rupee is down 5.07% so far in 2026. Over the last six months it has fallen 1.23%. The currency has recovered 1.05% since May, when it was the worst performer in the Asian basket.

ALSO READ: RBI Curbs May Support Rupee, But Oil Prices Remain A Risk: Nomura's Sonal Varma

Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.