The Indian rupee is set to open higher on Monday, supported by ​spillover effects of the central bank's recent actions, though persistent ‌oil-related demand and foreign equity selling could temper ​sentiment. The rupee is likely to open in ⁠the 92.80-92.90 range versus the US dollar, having settled at 93.10 on Thursday, per traders. Indian financial markets were shut ‌on Friday for Good Friday.

The Indian currency jumped 1.8 per cent last week, its best showing ‌in over four years, after the Reserve Bank of ‌India ⁠imposed position limits on banks and corporates, ⁠curbing the onshore-NDF arbitrage activity. This triggered an unwinding of bank positions, leading to dollar selling in the onshore market. The banks have ​to bring down their positions ‌to the RBI-mandated level by April 10.

While a "number" of banks have already cut positions and are now below the new limits, there are a ‌few that remain, a currency trader at a ​bank said.

"That should be a source of support (for rupee) through this week," he said. The ⁠central bank followed up with restrictions on speculative activity by corporates and barred banks from offering NDF to clients, ‌which bankers said highlighted the central bank’s intent to back the rupee.

Still, traders say the broader outlook for the rupee remains weak amid rising oil prices and continued foreign outflows, particularly from equities.

Oil prices climbed on Monday on continuing fears of supply losses ‌because of shipping disruptions due to the US-Israeli war with Iran. On ​Sunday, Trump ratcheted up pressure on Tehran, threatening in an expletive-laden Easter Sunday social media ⁠post to target Iran's power plants and bridges on ⁠Tuesday if the strategic Strait of Hormuz is not reopened.

Meanwhile, foreign investors continued to shun ‌Indian equities amid concerns over the economic impact of rising oil prices, pulling out nearly $1 billion on ​Thursday after withdrawing over $12.5 billion in March.

Published on April 6, 2026