The Indian rupee strengthened sharply on Thursday. It rose 1.98 percent from its previous close, marking its biggest single-day gain in 12 years. This rally came after the Reserve Bank of India introduced fresh measures to control speculative trading in the currency market. These steps improved investor confidence.
Rupee Gains Against US Dollar
The rupee climbed to 92.82 against the US dollar. It gained 188 paise compared to its previous close of 94.70 on Monday. Traders expected more dollar supply in the domestic market. This followed the unwinding of speculative positions.
Earlier in the session, the rupee had risen as much as 1.8 percent to 93.17. This was its strongest intraday move since September 2013, after trading resumed following a two-day break.
RBI Tightens Rules to Curb Speculation
The central bank increased its efforts to reduce arbitrage and speculative bets. These activities had been putting pressure on the rupee.
On Wednesday, the RBI introduced stricter rules. It stopped banks from offering rupee non-deliverable forwards (NDFs) to both resident and non-resident clients. It also barred companies from rebooking cancelled forward contracts.
These measures aim to limit excessive speculation in the currency market.
Global Risks Still Remain
Despite the rupee’s rise, global risks continue to affect markets. Oil prices surged amid rising geopolitical tensions.
Brent crude prices increased by about 5 percent to around $106 per barrel. This followed comments by US President Donald Trump, who warned that the US could strike Iran “extremely hard" in the coming weeks.
Investor Activity in Stock Markets
Foreign investors continued to pull out funds. Foreign portfolio investors (FPIs) sold shares worth ₹8,331 crore on Wednesday.
At the same time, domestic institutional investors (DIIs) bought stocks worth ₹7,172 crore, according to provisional data from the National Stock Exchange.
Recent Pressure on Rupee
Earlier in the week, the rupee had come under pressure. On Monday, it crossed the 95-per-dollar mark during intraday trading.
This drop reflected market concerns after the escalation of the Iran conflict, which unsettled global financial markets.