Indian Rupee Rebounds to 93 Levels Following RBI Intervention

Q: How much did the rupee appreciate after the RBI's intervention?

The rupee appreciated by 2%, reaching **92.8350 per dollar**.

Original: ‘RBI move working..’: Deepak Shenoy flags sharp rupee rebound to 93 levels

Mint•Apr 2, 20263 min

In a Nutshell

The Indian rupee rebounded sharply to 92.8350 per dollar, a 2% increase, following the Reserve Bank of India's (RBI) measures to curb currency speculation. Deepak Shenoy, CEO of Capitalmind Mutual Fund, noted that the RBI's actions are beginning to stabilize the currency after it had recently dropped below 95.

Key Points

01The rupee appreciated to 92.8350 against the US dollar, marking a 2% increase.
02Deepak Shenoy highlighted the RBI's intervention as a key factor in the currency's recovery.
03The RBI's measures include capping banks' net open positions and restricting non-deliverable forwards (NDFs).
04The rupee had previously weakened to 94.70 and breached 95 earlier in the week.
05Analysts note that the RBI's actions are effectively reducing speculative trading and stabilizing the currency.

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Full Summary

On Thursday, the Indian rupee experienced a significant recovery, strengthening to 92.8350 per dollar, a 2% increase from previous lows. This rebound is attributed to the Reserve Bank of India's (RBI) aggressive measures aimed at curbing currency speculation. Deepak Shenoy, CEO of Capitalmind Mutual Fund, remarked on the positive impact of the RBI's actions, indicating a shift in market sentiment. Earlier in the week, the rupee had fallen below 95, settling at 94.70 before this recovery. The RBI's intervention includes capping banks' net open positions in the rupee to $100 million and prohibiting certain forward contracts, disrupting the $149 billion-a-day non-deliverable forward (NDF) market. These steps are seen as crucial in reducing speculative pressures that have contributed to the rupee's volatility, which had depreciated nearly 4% in March alone. Analysts are now recognizing the effectiveness of the RBI's measures in stabilizing the currency.

Key Figures

₹92.8350

Current exchange rate of the rupee against the US dollar

2%

Percentage increase in the rupee's value

$100 million

New cap on banks' net open positions in the rupee

$149 billion

Daily trading volume in the non-deliverable forward market

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Why It Matters

The RBI's measures are expected to reduce volatility in the currency market, potentially stabilizing prices for imports and affecting loan EMIs tied to the dollar.

Who is affected

importers, exporters, and consumers relying on foreign goods

What to know

Businesses should monitor exchange rates closely and consider hedging strategies to mitigate currency risk.

FAQ

The RBI capped banks' net open positions in the rupee at $100 million and restricted access to non-deliverable forwards (NDFs).

The rupee appreciated by 2%, reaching 92.8350 per dollar.

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