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Indian Rupee Posts Best Week in Seven Months Amid Policy Support
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Moneycontrol•16-10-2026, 15:45
Indian Rupee Posts Best Week in Seven Months Amid Policy Support
- •The Indian rupee rose 2% this week, marking its biggest weekly gain in seven months, supported by government and central bank policy measures.
- •The currency closed at 94.96 per dollar, recovering from near-record lows hit the previous week.
- •Policymakers intervened by redirecting oil dollar demand, raising the cost of rupee protection, and slashing limits for undocumented dollar purchases.
- •Analysts warn that lasting turnaround depends on easing underlying strains like India's wider current account deficit and inflation differentials.
- •HSBC expects the rupee to face upward pressure over time, weakening to 96 by the end of the year and 98 by the end of 2027.
Key Questions Answered
The Indian rupee rose 2% due to policy measures aimed at boosting the currency, recovering after nearly breaching its record low of 96.96.
Policymakers redirected oil dollar demand away from the market, raised protection costs against a weaker rupee, and slashed the limit for dollar purchases without underlying documentation by 95% to $5 million.
HSBC notes that unless oil prices collapse, upward pressure persists due to India's wider current account deficit, inflation differentials, a lack of portfolio inflows, and the RBI's short FX forward position.
