The rupee on Tuesday closed up about 21 paise despite crude oil price hardening to about $91 per barrel as the RBI is believed to have intervened in the non-deliverable forward (NDF) market before the Indian forex market opened
The rupee closed below 95 on Tuesday, a two-month high of 94.95 per US dollar, buoyed by robust Foreign Currency Non-Resident (Bank)/ FCNR (B) deposit inflows under the RBI’s concessional swap facility and apparent RBI intervention amid fresh tensions in West Asia that sent crude oil prices higher.interest ratesIn the process, the Indian currency (INR) ended at almost the same level as on June 5 when the RBI announced measures to attract foreign capital. With the concessional swap facility available only for FNCR (B) deposits mobilised by banks up to August 31, the interest rates on these deposits will get normalised to about 3-4 per cent from the 6.00-7.50 per cent offered during the 85-day period the facility was open (from June 8, 2026, to August 31, 2026).Market players estimate that during the period the concessional swap facility was available for banks, they would have mobilised FCNR (B) deposits of 3-5 year tenor aggregating to about $80 billion and swapped them with the RBI. When the RBI announced measures such as providing a limited period facility of concessional forex swap to incentivise ECBs by PSUs and a similar facility to bear the full hedging cost to banks for raising fresh 3–5-year FCNR (B) deposits on June 5, the rupee had perked up 85 paise to close at 94.94/dollar.The rupee on Tuesday closed up about 21 paise despite crude oil price hardening to about $91 per barrel as the RBI is believed to have intervened in the non-deliverable forward (NDF) market before the Indian forex market opened.Dilip Parmar, Senior Research Analyst, HDFC Securities, observed that the rupee is on a winning streak, locking in its third straight day of gains and outperforming its Asian peers, thanks to a stellar domestic growth numbers even after geopolitical tension simmering and the central bank stepping in with dollar supplies.“On the technical front, spot USDINR is facing a tough resistance at 95.30 resistance, while a firm support has been seen around 94.50. However, traders should buckle up for a bumpy ride ahead as geopolitical news and surging crude oil prices are locked and loaded to trigger some serious volatility,” he said.Abhishek Bisen, Head Fixed Income, Kotak Mutual Fund, noted that FCNR (B) deposit flows more than offset the pressure from Brent crude prices of around $91.88 per barrel, geopolitical tensions in West Asia and expectations of a possible US Federal Reserve rate hike.“Strong estimated Q1 FY27 GDP growth of 7.8 per cent further strengthened sentiment. Overall, the robust inflows reflect continued investor confidence in India and the attractiveness of INR-denominated assets,” he said.forex reservesWith banks attracting inflows of $65.397 billion under FCNR (B) deposits between June 8 and August 21, India’s foreign exchange reserves soared to an all-time high of $729.328 billion in the week ended August 21. In the reporting week, reserves jumped by $12.422 billion. Since March-end 2026, India’s reserves perked up by $38.221 billion. The previous record high for India’s forex reserves was $728.494 billion in the week ended February 27.Published on September 1, 2026
