The rupee appreciated about 0.5 per cent over the past week and closed at 92.99 against the dollar on Tuesday. The recovery indicates some stabilisation after recent volatility, although underlying risks remain.

A key factor supporting the rupee has been the recent measures by the Reserve Bank of India, particularly the cap on banks’ Net Open Position (NOP-INR). As banks continue to unwind dollar positions ahead of the April 10 deadline, supply of dollars in the market has improved, helping the local currency move away from extreme weakness.

However, external risks continue to pose challenges. Crude oil prices remain elevated, with Brent futures trading around $110 per barrel and already up over 6 per cent so far this month. For an oil-importing country like India, sustained high crude prices can widen the current account deficit and increase dollar demand, exerting pressure on the rupee.

Foreign flows have also been unfavourable. According to NSDL data, net FPI outflows in April so far stand at $5.4 billion, taking the year-to-date outflows to about $18 billion.

Geopolitical tensions involving Iran continue to keep markets on edge, while investors are also closely watching the RBI’s policy decision, where the repo rate is expected to remain unchanged at 5.25 per cent.

Overall, while regulatory measures have provided near-term support, global and domestic headwinds remain in play.

Chart 

The rupee has been on a recovery since early last week. While the overall trend has not reversed, the prevailing price action shows that the upswing can extend a bit more.

The nearest resistance is at 92.60, the 50 per cent Fibonacci retracement level of the prior downswing. There is a good chance for the local currency to surpass 92.60 and appreciate to 92, a notable resistance.

On the other hand, if the rupee slips from the current level of 92.99, it can find support at 93.50. Subsequent support is at 94.

While the rupee shows signs of some more recovery, the dollar index, which appreciated 2.3 per cent in March, seems to be sticking to a sideways trend. It struggles to decisively break out of the barrier at 100.50 and at the same time, it has successfully been defending the base at 99.

Note that a breakout of 100.50 by the dollar index can bring back the bearish sentiment in the rupee, leading to a fresh sell-off. Nevertheless, as it stands, the dollar index is likely to stay flat whereas the Indian currency can inch up in the upcoming sessions.

Outlook 

Based on the current setup, the rupee can appreciate towards 92.30–92 in the near term. That said, further gains beyond 92 may be limited due to the on-going geopolitical risks.

Published on April 7, 2026