Indian Rupee Rise: News of relief has emerged from the Indian currency market. To rein in the ever-decreasing rupee, the Reserve Bank of India (RBI) has taken some very strict measures over the weekend. The positive impact of these decisions was seen as soon as the market opened on Monday morning. These measures, taken to stem rising demand for the dollar and speculative trading, have breathed new life into the rupee.

Rupee gets a booster from RBI

The Indian rupee opened at 95.76 against the dollar on Monday. It was at the level of 96.73 when the market closed last Friday. Accordingly, the rupee has strengthened by about 1 percent. This improvement in the rupee has come at a time when the currency market was going through a lot of pressure.

In the calendar year 2026, the rupee depreciated by more than 7 percent. At the same time, it had declined by about 3.5 percent so far in fiscal 2027. It was very close to its record low of 96.96 per dollar in May. The main reasons behind this huge pressure on the rupee are high crude oil prices, strong dollar and continued withdrawals by foreign investors.

A new system for oil companies

RBI has adopted a special strategy to control the demand for dollar. The Reserve Bank has started a special facility for major state-owned oil companies like Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation. Now these companies will be able to meet their daily dollar requirements directly through designated banks instead of the regular spot market.

Apart from this, RBI has also taken strict action to prevent betting. The limit for certain foreign currency derivative transactions with no underlying exposure has been reduced from $100 million to $50 million. In addition, it has also been made mandatory to maintain 20 per cent cash reserve on some selected foreign exchange contracts.

What are the experts’ views?

Market experts believe that these decisions have several implications. According to a trader at a major brokerage firm, the special window for oil companies will significantly reduce dollar demand in the regular market. This will help in controlling extreme fluctuations in the market. However, one aspect of it is that this facility will increase the pressure on RBI’s foreign exchange reserves.

A private bank’s treasury head says these restrictions will provide good support to the rupee for some time. But due to uncertainty in the process of implementing the new rules, banks may be more cautious in setting dollar rates. This can affect liquidity in the market and widen the difference between the buying and selling prices in the foreign exchange market.

What will be the status of rupee in future?

These measures could increase the cost of forward hedges, which could reduce demand for dollars from importers. However, these rules do not reduce the real demand for dollars arising from oil imports, trade remittances or foreign capital inflows. They just change the way the dollar is bought or make it a little more expensive.

According to currency experts, the USD/INR pair is expected to trade in the range of 95.30 to 96.20 in Monday’s trading session. Support level for rupee is at 94.50 while resistance is at 96.70. Even though these new measures by the RBI have eased the immediate pressure on the rupee, the real challenges are far from over.