The Indian rupee strengthened
sharply on Wednesday, helped along by foreign portfolio inflows
linked to Jio Platforms’ IPO while persistently elevated oil
prices kept traders cautious about positioning for further gains
in the unit.
The rupee closed up 0.5% at 94.46 against the
dollar after touching a peak of 94.43 earlier in the day, its
strongest level since early September.
It trimmed gains in the latter half of the session as oil
prices rose and local stocks fell. Brent crude oil futures were
last up 1.3% at over $110 per barrel while India’s benchmark
equity index, the Nifty 50, declined 0.7%.
Escalating Middle East tensions fuelled fears of supply
disruptions, lifting oil prices after Iran told Pakistan’s army
chief there would be no talks with Washington until its demands
were met.
“Volatility in oil will keep rupee a little on the defensive
but sharp falls are unlikely in the near term,” a trader at a
state-run lender said.
Despite the global headwinds, inflows linked to Jio
Platforms’ $3.2 billion IPO aided the rupee. The IPO
was fully subscribed in less than two hours of public bidding on
Wednesday as investors flocked to India’s largest share sale.
“With USD/INR holding below 95.00, focus shifts to
94.80–94.70. A sustained break below 94.80 could open the way
towards 94.00 over the coming weeks, keeping the near-term
outlook favourable for the rupee,” said Amit Pabari, managing
director at FX advisory firm CR Forex.
Elsewhere, Asian currencies were mostly rangebound and the
dollar index was little changed at 101.8.
Focus will now turn to the release of the minutes of the
RBI’s latest monetary policy review held earlier this month. The
central bank had delivered its first rate hike in four years on
October 7 and signalled more were likely to come.
Data released last week showed that India’s retail inflation
accelerated to a higher-than-expected 5.54% in September.
Swap markets are currently pricing in over 100 bps of rate
hikes by the RBI over the next 12 months.
Published on October 21, 2026
