The Indian rupee rebounded sharply on Wednesday, posting its largest intraday gain in nearly four months after approaching a record low, driven by heavy support from the Reserve Bank of India (RBI) and renewed optimism over trade negotiations with the United States.
The currency rose as much as 0.9% to 87.9987 per dollar before paring some gains, after having weakened to 88.8025 on Tuesday.
Market sources indicated that the RBI likely sold dollars in both offshore and onshore trades to stabilize the rupee, echoing a similar intervention earlier this year in February when the central bank sold billions of dollars to curb speculative pressure on the currency.
Analysts observed that the rupee has remained relatively flat over the past three weeks, suggesting that the RBI has been quietly acting to prevent it from slipping past the 89-per-dollar level.
Experts noted that the central bank’s active presence, combined with expectations of India fast-tracking trade negotiations with the US, contributed to the currency’s sharp recovery.
Reports suggest that New Delhi aims to conclude trade discussions by next month, a development that, along with a softer dollar influenced by anticipated US Federal Reserve rate cuts, provided additional support to the rupee.
Market strategists highlighted that the RBI’s interventions around the 88.80 mark indicate a deliberate effort to prevent excessive and rapid depreciation of the currency.
Analysts further noted that if the rupee sustains gains above 88.10 per dollar, it could potentially strengthen toward the 87 level.
The combination of central bank action, trade optimism, and a broadly weaker dollar environment helped lift the rupee alongside other Asian currencies, signaling renewed confidence in the domestic currency and a cautious but steady stabilization of the foreign exchange market.
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