Rupee rises 1.28 to 93.57 after RBI limits banks’ dollar trades to USD 100 million to curb speculation. Rising crude prices and geopolitical tensions continue to pressure the currency, while equity markets reflect investor caution
-1774852663675_d.png "West Asia war: Rupee rebounds 1.3 per cent after RBI caps banks’ forex positions")
RBI curbs speculative trading as rupee recovers from record low. File Pic
The Indian rupee bounced back sharply in early trade on Monday, gaining 1.3 per cent which is 128 paise to 93.57 per US dollar from its all-time low of 94.85 recorded on Friday, reported the PTI.
Analysts say the rebound comes after the Reserve Bank of India (RBI) imposed restrictions on how much banks can bet on the rupee in the foreign exchange market.
On March 27, 2026, the RBI issued a circular limiting banks’ net open positions (NOP) in rupees to USD 100 million by April 10. Banks acting as authorised dealers must follow this daily cap to reduce speculative trading that can put pressure on the rupee.
“Banks that generally hold large long positions in dollars may now sell some of them to comply with the RBI cap. This could temporarily strengthen the rupee,” said Amit Pabari, MD of CR Forex Advisors, as per the PTI.
Geopolitical tensions push oil prices higher
Despite the recovery, the rupee still faces headwinds. Rising crude oil prices and global geopolitical tensions are fueling dollar demand. Brent crude futures surged 2–3 per cent to USD 115–116 per barrel amid concerns about supply disruptions from the US-Iran conflict, while US WTI crude stood at USD 103.38 per barrel.
“India, being a major oil importer, sees higher dollar demand when oil prices rise. This puts natural pressure on the rupee,” Pabari added.
Impact on the market
The rupee’s recent weakness comes amid broader macroeconomic concerns. Rising energy costs, high inflation, and slower GDP growth prospects are weighing on investor sentiment. March saw the rupee fall more than 4 per cent, and on Friday, it dropped nearly 1 per cent to 94.85 to an all time historic low.
The equity markets also mirrored investor caution, with the Sensex dropping 1,191 points to 72,391 and the Nifty falling 349 points to 22,470. Foreign investors sold equities worth Rs 4,367 crore on a net basis on Friday.
Near-term outlook
Analysts said the RBI’s position limit is likely to support the rupee in the near term as banks adjust their holdings. “The rebound is primarily driven by banks unwinding positions, not by a change in fundamentals. The overall picture remains delicate,” Pabari noted.
However, sustained global dollar demand, energy-led inflation risks, and geopolitical uncertainty continue to keep the currency under pressure. “The rupee’s bias remains weak unless crude prices see a meaningful correction,” analysts added as per IANS.
(With PTI and IANS Inputs)
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