Mumbai: The Indian rupee staged a sharp recovery against the US dollar in early trade on Monday, buoyed by a steep fall in global crude oil prices a day after the Union Budget 2026–27 was presented. The domestic currency strengthened by over 30 paise, easing concerns after touching record lows last week.
In the interbank foreign exchange market, the rupee opened on a weak note near the 92-mark but quickly gained ground as selling pressure on the dollar eased. Traders said the sudden drop in crude oil prices reduced immediate worries for India, which depends heavily on oil imports, offering short-term support to the local currency.
The rupee had faced intense pressure at the end of last week, slipping past previous lows amid global uncertainty and pre-Budget nervousness. However, Monday’s recovery reflected a combination of softer oil prices and improved sentiment in domestic equity markets, which bounced back after volatility during the Budget presentation.
Market participants noted that while the Budget did not deliver any instant trigger for the currency, it provided clarity on the government’s fiscal path. The Centre’s borrowing plans and its commitment to gradually reducing the fiscal deficit are being closely watched by currency traders for their long-term impact on capital flows.
Currency experts believe the dollar-rupee pair is currently at a sensitive level. “The 92 zone remains a key psychological barrier,” said a forex market analyst, adding that sustained movement beyond this level could invite further volatility, while a failure to break above it may lead to consolidation in the near term.
On the global front, the US dollar remained firm against major currencies, limiting the rupee’s upside. However, Brent crude futures slipped sharply from recent highs, trading well below earlier levels amid easing geopolitical concerns. This decline in oil prices helped reduce pressure on India’s trade balance and inflation outlook.
Domestic equities also lent support, with benchmark indices recovering losses and trading higher in early sessions, improving overall risk appetite. Despite the rupee’s rebound, dealers remain cautious, pointing out that global market trends, US monetary policy signals and India’s fiscal execution will continue to shape currency movement in the coming weeks.
