Archive · 25 Aug 2026
Rupee Opens Higher as RBI Intervention Cushions Currency Pressures
The Indian rupee started the day slightly stronger against the US dollar.
The Reserve Bank of India appears to be selling dollars to help support the rupee.
This support is important because expensive oil and strong demand for dollars are putting pressure on India's currency.
India has also received large dollar inflows and increased its foreign-exchange reserves.
Gold now makes up a significant part of those reserves.
However, buying expensive oil and gold can make India's import bill larger.
Tensions involving Iran and possible disruptions to Gulf oil exports could push oil prices even higher.
An analyst expects the rupee to stay in a narrow range for now, but it could weaken if the dollar becomes more expensive.
The rupee opened 2 paise higher at 95.73 against the US dollar on Tuesday, August 25.
State-run banks were seen selling dollars, likely on behalf of the Reserve Bank of India.
Inflows through the special USD-INR swap facility reached nearly $73 billion, including about $65.4 billion through FCNR(B) deposits.
India's foreign-exchange reserves include a record 880.52 tonnes of gold, representing nearly 16.7% of total reserves.
Analyst Amit Pabari expects USD/INR to remain between 95.60 and 95.80 initially, with a possible rise toward 96.20–96.50 above 95.80.
- Who
- The Indian rupee, the Reserve Bank of India, state-run banks, and currency-market traders.
- What
- The rupee opened 2 paise higher at 95.73 against the US dollar amid apparent central-bank intervention.
- When
- Tuesday, August 25; the articles do not specify the year.
- Where
- India's foreign-exchange market.
- Why
- The intervention was intended to cushion the rupee against elevated crude oil prices, sustained corporate dollar demand, and global market volatility.
Currency Support
Market Pressures
RBI intervention
Currency Support
The Reserve Bank of India is seen using dollar sales through state-run banks to keep the rupee within a narrow range and limit volatility.
Market Pressures
Sustained corporate dollar demand, elevated US bond yields, and global uncertainty could continue putting pressure on the rupee despite intervention.
Reserve management
Currency Support
Strong dollar inflows and higher gold holdings are helping India build external buffers and strengthen reserve management.
Market Pressures
Using incoming dollar flows to build reserves rather than allowing the rupee to appreciate could leave the currency exposed to future pressures.
Oil and geopolitical risks
Currency Support
A stable rupee and larger reserves could help India manage financial-market volatility caused by geopolitical tensions.
Market Pressures
Any disruption to Gulf oil exports could raise crude prices, increase India's import bill, and add further pressure to the rupee.
- Opening exchange rate
- 95.73 rupees per US dollar
- Opening move
- The rupee gained 2 paise
- Swap-facility inflows
- Nearly $73 billion
- FCNR(B) deposit inflows
- Approximately $65.4 billion ahead of the August 31 deadline
- India's gold reserves
- 880.52 tonnes
- Gold's share of foreign-exchange reserves
- Nearly 16.7%
- Near-term USD/INR forecast
- 95.60–95.80, with a potential move to 96.20–96.50 above 95.80