Rupee gains 96 paise after RBI measures to curb forex volatility

what happened

Newsmetry API reports that the Indian rupee opened 97 paise higher at 95.76 per US dollar, compared with the previous close of 96.73. It later gave up almost all of the advance and ended at 95.77, recovering losses accumulated over two weeks. The last stronger opening came on February 3, 2026, when the currency started 111 paise higher at 90.40 per dollar versus 91.51 previously.

On October 10, the RBI restricted the rebooking of cancelled foreign-exchange derivative contracts, cut the threshold for transactions without proof of underlying exposure from $100 million to $5 million, introduced a foreign exchange risk reserve for banks and required additional documentation. It also opened a special window to supply the daily dollar needs of three public-sector oil marketing companies.

Officials from Karur Vysya Bank, Bank of Baroda and HDFC Securities said the steps were intended to curb speculation and one-sided expectations. Lower crude prices supported the rupee, while weaker domestic equities and foreign fund outflows limited its gains. The 10-year government bond yield rose about eight basis points to 7.3850% amid expectations of faster RBI rate increases and possible open-market sales of government securities.

why it matters

The contrasting moves in the rupee and government bonds show how RBI measures affected currency and debt markets differently. Parmar said the USD/INR outlook will depend on dollar flows, the trade balance, interest-rate differentials and geopolitical developments.

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