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Rupee Strengthens to 87.68 Against Dollar Amid RBI Support and Positive Market Sentiment

The Indian rupee opened stronger on Thursday, appreciating 40 paise to 87.68 against the U.S. dollar in early trade, tracking central bank intervention, a softer...

Oct 16
2 min read
Rupee Strengthens to 87.68 Against Dollar Amid RBI Support and Positive Market Sentiment

The Indian rupee opened stronger on Thursday, appreciating 40 paise to 87.68 against the U.S. dollar in early trade, tracking central bank intervention, a softer dollar index, and supportive domestic factors.

Key Drivers of Rupee Appreciation

Forex analysts attributed the rupee’s gains to multiple factors:

  • Reserve Bank of India (RBI) intervention: Market experts say the central bank’s measures have curtailed excessive speculative trading. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, noted, “RBI ensured that the rupee opens higher, curbing speculative trades and preventing the currency from falling past 88.39 on Wednesday.”

  • Global cues: The U.S. dollar index, measuring the greenback’s strength against a basket of currencies, fell 0.28% to 98.51, easing pressure on emerging market currencies.

  • Domestic equity optimism: Early trade saw the Sensex jump 407 points to 83,013 and the Nifty rise 104 points to 25,427, signaling investor confidence.

  • Foreign fund inflows: Foreign Institutional Investors (FIIs) purchased equities worth ₹68.64 crore on Wednesday, supporting the rupee.

  • Crude oil prices: Brent crude futures climbed 0.74% to $62.37 per barrel, moderating inflation concerns and easing import-related pressure.

The rupee had rebounded sharply on Wednesday, gaining 73 paise to 88.08, marking its biggest intraday rise in nearly four months. Thursday’s early gains suggest that the currency may trade in a range of 87.30 to 88.00 for the day.

Trade and Economic Context

Despite the rupee’s short-term gains, India’s trade deficit widened in September 2025. Exports grew 6.74% to $36.38 billion, but imports surged 16.6%, pushing the deficit to $31.15 billion, the highest in over a year. Analysts say rising crude and commodity imports continue to pose challenges for currency stability.

Market Outlook

Traders are watching the RBI’s stance closely, with expectations that the central bank will continue to intervene to manage excessive volatility. Positive equity sentiment, coupled with controlled dollar strength, is likely to keep the rupee supported in the near term.