The Indian Rupee (INR) extended its losing streak on Tuesday, declining about 38 paise, as ongoing geopolitical tensions, importer-driven dollar demand and partial roll-back of the April 1 RBI measures that prevented Authorised Dealers (ADs) from offering foreign exchange derivative contracts involving INR, weighed on it.

The Indian currency ended the day weaker at 93.51 per US dollar against the previous close of 93.13. INR closed 20 paise weaker on Monday.

Amit Pabari, MD, CR Forex Advisors, said amid factors such as tensions between the US and Iran resurfacing; lack of clarity on the conflict; the temporary ceasefire, which expires this week, seeming fragile; and statements from both sides suggesting that the situation could swing either way, the Reserve Bank of India made a move on Monday that quietly shifted the domestic equation.

He noted that on April 1, 2026, the RBI had tightened rules on rupee derivatives, essentially putting a lid on speculative and arbitrage-driven volatility when the currency was hitting record lows. Now, it has partially rolled back those restrictions.

“By allowing genuine hedging flows from importers and exporters to resume, the RBI is restoring normal market function. But by keeping limits like the $100-million cap on net open positions, it is ensuring that speculative excess does not creep back in.

“However, there’s a catch. With more freedom for hedging, dollar demand is likely to increase in the near term, especially from importers rushing to cover exposures. And that adds another layer of pressure on the rupee,” Pabari said.

Published on April 21, 2026