The Indian rupee snapped its three-day losing streak and appreciated 20 paise against the US dollar on Tuesday, settling at 95.41, as easing crude oil prices and a weaker greenback improved investor sentiment amid hopes of a de-escalation in US-Iran tensions, according to Business Today.
Rupee Snaps Losing Streak
At the interbank foreign exchange market, the rupee opened at 95.47 against the greenback and traded between an intraday high of 95.23 and a low of 95.67 before closing at 95.41, a gain of 20 paise from its previous close of 95.61, the source reported. This followed a decline of 43 paise on Monday. Forex traders attributed the recovery to a combination of factors: lower crude oil prices, a softer US dollar, positive domestic equities, softer US Treasury yields, and likely intervention by the Reserve Bank of India (RBI).
| Metric | Value |
|---|---|
| Opening rate | 95.47 |
| Intraday high | 95.23 |
| Intraday low | 95.67 |
| Closing rate | 95.41 |
| Change vs previous close | +20 paise |
Analysts Weigh In
Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, was quoted by PTI as saying: "We expect the rupee to trade with a negative bias due to uncertainty in the West Asia war. Any fresh escalations in the West Asia war may again lead to a spike in crude oil prices and pressurise the rupee. However, if the de-escalation remains, we may see some recovery in the rupee." He added that traders would take cues from US ADP weekly employment, trade balance, and existing home sales data, and expected the USDINR spot price to trade in a range of 95.10 to 95.80.
Dilip Parmar, Research Analyst at HDFC Securities, said the rupee strengthened on improving risk appetite, supported by lower crude prices and a weaker dollar. "Additionally, the resumption of inflows into the debt market, following recent RBI measures, provided further support. In the near term, spot USD-INR faces resistance at 95.80 and support at 94.70, with the short-term bias remaining constructive for the rupee on expectations of continued inflows," Parmar stated.
External Sector Data
The rupee also drew support from India's external sector data released this week. According to RBI data cited in the source, India recorded a current account surplus of $7.1 billion (0.7% of GDP) in the January-March quarter of 2025-26, aided by higher services exports and remittances. This compares with a surplus of $13.7 billion (1.4% of GDP) in the same quarter a year earlier. For the full fiscal year 2025-26, the current account deficit stood at $25.2 billion (0.6% of GDP), versus $22.9 billion (0.6% of GDP) in the prior year.
| Period | Current Account Balance | % of GDP |
|---|---|---|
| Q4 FY26 (Jan-Mar 2026) | +$7.1 bn (surplus) | 0.7% |
| Q4 FY25 (Jan-Mar 2025) | +$13.7 bn (surplus) | 1.4% |
| FY26 full year | –$25.2 bn (deficit) | 0.6% |
| FY25 full year | –$22.9 bn (deficit) | 0.6% |
Market Context and Geopolitical Factors
On the domestic equity front, the Sensex rose 394.50 points to close at 73,918.76, while the Nifty gained 119.10 points to finish at 23,242.10. Despite the positive equity performance, foreign institutional investors (FIIs) sold equities worth ₹4,566.03 crore on a net basis during the session, exchange data showed.
The dollar index, which measures the greenback against a basket of six currencies, was trading 0.24% lower at 99.80. Brent crude, the global oil benchmark, fell 2.04% to $92.33 per barrel in futures trade.
Market participants also tracked geopolitical developments. US President Donald Trump reportedly urged Israeli Prime Minister Benjamin Netanyahu not to retaliate against Iran's latest missile attacks, warning that it could derail ongoing peace efforts. Trump also urged Iran to return to the negotiating table, according to the source.
For finance executives and treasury professionals, the rupee's recovery offers a temporary reprieve for importers, but persistent West Asia risks and the potential for renewed crude price spikes keep hedging needs elevated. The RBI's likely intervention signals a cautious approach to managing volatility, while the narrowing current account deficit suggests improved external stability—a positive signal for sovereign creditworthiness and trade finance cost of capital.
Sources:
