The rupee ended higher on Thursday after depreciating for the last four sessions, supported by renewed optimism over a potential ceasefire between Iran and the US, which kept crude oil prices below $100 per barrel, dealers said.
The local unit closed at 93.20 per dollar, up 0.2 per cent from 93.38 per dollar on Wednesday. In April, the rupee has appreciated 1.73 per cent and is the fourth-best performing currency among Asian peers so far this month. In FY26, the currency has depreciated 9.85 per cent.
“After four sessions of weakness, the Indian rupee gained ground as renewed risk-on sentiment prompted foreign institutional investors to return to the domestic equity markets,” said Dilip Parmar, research analyst, HDFC Securities. “This recovery was bolstered by a declining trade deficit and a reduction in dollar demand.”
Merchandise trade deficit narrowed materially in March to $20.7 billion from $27.1 billion in February, beating most estimates.
Traders said the movement in the currency was largely driven by positive developments in the Iran conflict and tighter limits on banks’ net open positions, which reduced appetite for bets against the rupee.
“FPIs were seen selling dollars. Also, around or near 93.36 levels, RBI was also selling dollars, not allowing the rupee to depreciate much. Markets are still factoring some positivity in the talks between the US and Iran,” said a forex dealer with a state-owned bank.
Despite the gains, elevated crude oil prices continued to support dollar demand.
“The oil prices were, however, higher, keeping the dollar well bid near 93.24 levels and not allowing much appreciation in the rupee till afternoon, but towards the close, with FPIs selling dollars, the rupee appreciated towards 93.17. The only point of concern for India was that the crude basket was at $110.52 against oil price of $96.30 per barrel, keeping oil bids up,” said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors.
The dollar index, which measures the greenback against a basket of six currencies, rose 0.18 per cent to 98.03. Brent crude, the global benchmark, was trading 1.65 per cent higher at $96.50 per barrel in futures trade, although prices remained below the $100 mark amid hopes of a de-escalation in the region.
