The Indian Rupee pared its initial gains, settling at 94.34 against the US Dollar on Friday, registering a rise of 6 paise as the dollar index strengthened and crude oil prices lowered. On Thursday, the rupee settled 10 paise higher at 94.40 against the US dollar. For the week, the rupee rose 0.83%, marking its best performance since the week ended April 3. The domestic unit has been on a rising trend after the Reserve Bank of India announced dollar-attracting measures two weeks ago.
At the interbank foreign exchange, the rupee opened at 94.30 against the US dollar and traded in the range of 94.20-94.52. Eventually, it settled at 94.34 (provisional), up 6 paise from its previous close.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.76, lower by 0.08 per cent.
The RBI has been actively managing a structural shift in the Rupee as it has established a new equilibrium in the 94-96 band against the US Dollar amidst volatile markets owing to the Middle East crises. The new Rupee band marks a shift from the forecast of 90.3 by late June 2026. Rather than using harsh policies, the RBI has maintained its repo rate steady at 5.25%, signaling a neutral stance, hinting it as a deliberate move to reserve interest rates exclusively for domestic growth and inflation and utilize foreign exchange reserves to cushion the currency drop.
According to analysts, the domestic unit remains the lead performer among Asian currencies driven by resurgence of capital inflows and cooling oil prices. Experts added that investors have been waiting for the return to a 90 in order to operate on an obsolete baseline.