The rupee appreciated on Tuesday, tracking its Asian peers; however, dollar demand from large corporates capped gains, dealers said. The local currency settled at 90.58 per dollar against the previous close of 90.77 per dollar.
The dollar index fell below 97 to 96.84, from the previous day’s 97.35, which further aided the local currency. The index measures the strength of the greenback against a basket of six major currencies.
“The rupee was tracking the Chinese currency, which appreciated. Dollar demand from corporates continued,” said a dealer at a state-owned bank.
The dollar index fell as concerns intensified over weakening foreign demand for US assets amid expectations that the Federal Reserve could deliver two rate cuts later this year. Reports that Chinese regulators had advised institutions to limit exposure to US Treasuries also added to the pressure.
The Indian unit has appreciated 1.56 per cent so far in February on the back of the trade deal with the United States. The local currency was the worst-performing Asian currency in 2025 and in January.
So far in FY26, the rupee has depreciated 5.04 per cent against the dollar.
“In the near term, the 90.00–90.20 per dollar zone stands out as a very strong support area. As long as this region holds, the rupee may gradually drift higher towards 91.00–91.20 per dollar in the coming days. A key anchor remains the Reserve Bank of India. On rupee dips, the RBI is expected to step in with dollar purchases, absorbing inflows rather than allowing sharp appreciation,” said Amit Pabari, managing director at CR Forex.
Goldman Sachs, which has lowered its estimate of India’s current account deficit by around 0.25 per cent of GDP to 0.8 per cent of GDP in CY26 following the US tariff reduction announcement, said pressure on the rupee has eased but there is limited room for further gains from current levels. Any pick-up in portfolio inflows following the conclusion of the India–US trade deal is likely to be met with a gradual unwind of the short forward book and a further build-up of foreign exchange reserves by the RBI.
India’s foreign exchange reserves rose to a record high of $723.77 billion in the week ended January 30.
