The currency appreciated about 1.9% this week, making it the biggest weekly gain in seven months, traders said.
The rupee opened the day at 94.71, much stronger than the previous close of 95.05, and gained further to 94.67 but corporate dollar demand at lower levels forced it to settle at 94.96 in a shallow market. The unit closed at 96.73 last week very close to the lifetime low 96.96 seen on May 20.
The rupee was seen trading below 95 earlier in the week too but it closed decisively below that level Friday for the first time since September 8, 2026.
“A rebound in risk assets alongside the Reserve Bank of India’s aggressive defense strategy provided strong tailwinds for the local currency this week,” HDFC Securities senior research analysts Dilip Parmar said in a note.
The forward premiums remained elevated on account of tight liquidity and high bond yields. “There was not much change in rates from yesterday’s level,” a treasury head with a private bank said.
The trading volume in the forex market remained low as the central bank cracked down on speculative bets and shifted the dollar demand from state-owned oil retailers from the spot market. It has opened a separate window to meet the demand from Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp from its foreign exchange reserves.”On the technical chart, spot USD/INR is expected to find immediate support near 94.70, with resistance capped around 95.50,” Parmar said.
Meanwhile, the dollar index was down 0.3% at 101.7, prompting most Asian currencies to firm up.
