Indian rupee posts strongest one-day gain in six months

what happened

The Indian rupee strengthened by about 1% on Monday, moving from 96.73 to 95.77 per dollar. Reuters and Moneycontrol reported that the advance followed Reserve Bank of India (RBI) measures designed to reduce dollar demand in spot and derivatives markets, along with likely dollar sales through state-run banks. It was the currency’s strongest one-day gain since April.

India announced the latest steps on Saturday after the rupee approached its record low of 96.96 per dollar. Oil companies will redirect dollar purchases away from the spot market, while hedging rules have been tightened. The oil-related mechanism is expected to remove around $10-12 billion in monthly dollar demand from the spot market.

Banks became more cautious about providing importers with forward-dollar hedges after the RBI’s measures sharply increased costs. The rupee’s jump also attracted hedging-related flows into the non-deliverable forward market. Outflows from Indian stocks have exceeded $30 billion so far in 2026, while foreign-exchange reserves fell to $734 billion as of October 2 from a record $785 billion in September.

why it matters

ANZ said gradual rupee depreciation could resume after the measures’ initial impact fades unless broader balance-of-payments pressures ease. The firm kept its medium-term depreciation view and will reassess it using upcoming hedging and FX-reserve data.

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