Rupee Rises 18 Paise to 96.18 Against US Dollar in Early Trade
22 May 2026 10:53 AM IST22 May 2026 10:53 AM IST
Foreign Institutional Investors offloaded equities worth Rs 1,891.21 crore on a net basis on Thursday, according to exchange data.
Mumbai: The Indian rupee extended its gains for the second consecutive
session, appreciating by 51 paise to close at 95.69 against the US
dollar on Friday. The rupee has recovered by 113 paise in the last two
days as the Reserve Bank of India (RBI) aggressively sold dollars
worth $ 7-9 billion through state run banks (including $ 2 billion in
the Non-deliverable forward market).
Investor sentiment improved after US Secretary of State Marco Rubio
indicated that diplomatic talks linked to the Iran situation were
moving in a constructive direction. Although Rubio said he does not
want to be "overly optimistic", the remarks helped calm global markets
and oil prices temporarily.
At the interbank foreign exchange market, the rupee opened at 96.20 a
dollar. It touched a high of 96.31 and a low of 95.67 before closing
the day at 95.69 compared to its previous close of 96.20, an
appreciation of 51 paise against the dollar.
“There is a good chance that the US and Iran do a deal during the
weekend which can help the rupee appreciate to 95 levels. The rupee is
expected between 95.00 to 96.00 on Monday,” said Anil Bhansali, head
treasury Finrex Trading Advisors.
The rupee has been in the midst of a rapid and dramatic depreciation
streak, falling by over 7 per cent in the calendar year 2026 against
the dollar and touching successive record lows amid rising crude oil
prices, elevated global bond yields, persistent foreign fund outflows
and geopolitical tensions impacting global markets. In contrast, the
currencies of Indonesia and Philippines have depreciated by 4 to 5.5
percent year-to-date.
For India, which imports close to 90 per cent of its crude oil
requirements, the sustained rise in oil prices sharply worsened
concerns over the country’s external balances and inflation outlook.
India’s trade deficit widened to $28.4 billion in April, significantly
above expectations while Wholesale price inflation accelerated sharply
to 8.3 per cent y/y in April from 3.88 per cent previously, far
exceeding market expectations.
The supply related disruptions have pushed investors to move towards
safe haven assets and boosted the dollar demand.
The RBI has revived monetary operations to slow the rupee’s descent,
after the currency came within touching distance of a record low of 97
per dollar this week.
On Wednesday, the central bank announced a USD-INR buy/sell swap worth
approximately $ 5 billion for a tenor of three years on May 26.
The swap followed a review of current and evolving liquidity
conditions, the central bank said, and comes as it continues to defend
a rapidly weakening rupee by selling dollars from forex reserves.
According to the RBI release, the swap is in the nature of a "simple
buy/sell foreign exchange swap" from the Reserve Bank side, wherein a
bank shall sell US dollars to the Reserve Bank and simultaneously
agree to buy the same amount of US dollars at the end of the swap
period.
Union Commerce and Industry Minister Piyush Goyal a day earlier said
that all arms of the government are working together to address the
sharp fall in the Indian rupee against the US dollar, adding that
several measures are under consideration to stabilise the currency.
According to reports other measures being considered to attract
dollars flows are potential rate hikes, further tranches of currency
swaps, special non-resident deposit scheme and foreign currency debt
to draw inflows and backstop the currency.
However, Arvind Panagariya, Chairman of the Sixteenth Finance
Commission in a tweet said that RBI should allow the rupee to
depreciate if necessary and not treat the Rs 100-per-dollar mark as a
trigger for policy intervention.
“Oil Shortage is short-lived (3 months to a year): In this case, the
rupee will depreciate now but will substantially recover once the
oil-import bill shrinks and foreign capital seeks Indian investments
precisely to take advantage of the ‘cheap’ rupee,” Panagriya had
noted, on a thread posted on X.
dollar on Friday. The rupee has recovered by 113 paise in the last two
days as the Reserve Bank of India (RBI) aggressively sold dollars
worth $ 7-9 billion through state run banks (including $ 2 billion in
the Non-deliverable forward market).
Investor sentiment improved after US Secretary of State Marco Rubio
indicated that diplomatic talks linked to the Iran situation were
moving in a constructive direction. Although Rubio said he does not
want to be "overly optimistic", the remarks helped calm global markets
and oil prices temporarily.
At the interbank foreign exchange market, the rupee opened at 96.20 a
dollar. It touched a high of 96.31 and a low of 95.67 before closing
the day at 95.69 compared to its previous close of 96.20, an
appreciation of 51 paise against the dollar.
“There is a good chance that the US and Iran do a deal during the
weekend which can help the rupee appreciate to 95 levels. The rupee is
expected between 95.00 to 96.00 on Monday,” said Anil Bhansali, head
treasury Finrex Trading Advisors.
The rupee has been in the midst of a rapid and dramatic depreciation
streak, falling by over 7 per cent in the calendar year 2026 against
the dollar and touching successive record lows amid rising crude oil
prices, elevated global bond yields, persistent foreign fund outflows
and geopolitical tensions impacting global markets. In contrast, the
currencies of Indonesia and Philippines have depreciated by 4 to 5.5
percent year-to-date.
For India, which imports close to 90 per cent of its crude oil
requirements, the sustained rise in oil prices sharply worsened
concerns over the country’s external balances and inflation outlook.
India’s trade deficit widened to $28.4 billion in April, significantly
above expectations while Wholesale price inflation accelerated sharply
to 8.3 per cent y/y in April from 3.88 per cent previously, far
exceeding market expectations.
The supply related disruptions have pushed investors to move towards
safe haven assets and boosted the dollar demand.
The RBI has revived monetary operations to slow the rupee’s descent,
after the currency came within touching distance of a record low of 97
per dollar this week.
On Wednesday, the central bank announced a USD-INR buy/sell swap worth
approximately $ 5 billion for a tenor of three years on May 26.
The swap followed a review of current and evolving liquidity
conditions, the central bank said, and comes as it continues to defend
a rapidly weakening rupee by selling dollars from forex reserves.
According to the RBI release, the swap is in the nature of a "simple
buy/sell foreign exchange swap" from the Reserve Bank side, wherein a
bank shall sell US dollars to the Reserve Bank and simultaneously
agree to buy the same amount of US dollars at the end of the swap
period.
Union Commerce and Industry Minister Piyush Goyal a day earlier said
that all arms of the government are working together to address the
sharp fall in the Indian rupee against the US dollar, adding that
several measures are under consideration to stabilise the currency.
According to reports other measures being considered to attract
dollars flows are potential rate hikes, further tranches of currency
swaps, special non-resident deposit scheme and foreign currency debt
to draw inflows and backstop the currency.
However, Arvind Panagariya, Chairman of the Sixteenth Finance
Commission in a tweet said that RBI should allow the rupee to
depreciate if necessary and not treat the Rs 100-per-dollar mark as a
trigger for policy intervention.
“Oil Shortage is short-lived (3 months to a year): In this case, the
rupee will depreciate now but will substantially recover once the
oil-import bill shrinks and foreign capital seeks Indian investments
precisely to take advantage of the ‘cheap’ rupee,” Panagriya had
noted, on a thread posted on X.
( Source : Deccan Chronicle )
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