At the interbank foreign exchange market, the rupee opened at 95.77 against the U.S. dollar, then gained ground and touched 95.53 in early trade, up 5 paise from its previous close. In initial trade the rupee also touched 95.78 against the American currency.
| Photo Credit: Reuters
The rupee rose 5 paise to 95.53 against the U.S. dollar in early trade on Friday (May 29, 2026), after the U.S. and Iran reached an understanding to extend the ceasefire for another 60 days.
Forex traders said the agreement is expected to keep trade flowing through the strategic Strait of Hormuz while both countries continue negotiations around Iran’s nuclear program.
At the interbank foreign exchange market, the rupee opened at 95.77 against the U.S. dollar, then gained ground and touched 95.53 in early trade, up 5 paise from its previous close. In initial trade the rupee also touched 95.78 against the American currency.
On Wednesday (May 27), the rupee settled higher by 12 paise at 95.58 against the U.S. dollar.
Domestic equity and forex markets were closed on Thursday on account of Id-ul-Azha.
U.S. and Iranian negotiators reached a tentative agreement on Thursday (May 28) to extend the ceasefire in the three-month-old war by 60 days.
“For markets, this mattered because it reduced immediate fears of fresh disruption in oil supplies. As a result, crude oil prices stayed relatively stable, something that always offers relief to oil-importing countries like India,” CR Forex Advisors MD Amit Pabari said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.09, up 0.07%.
Brent crude, the global oil benchmark, was trading down 1.12% at $92.66 per barrel in futures trade.
According to traders a softer dollar and stable oil prices could provide some near-term support to the rupee. However, the rupee’s biggest challenge right now remains foreign investment flows.
Foreign institutional investors (FIIs) have sold nearly $24 billion from Indian equity markets since the beginning of 2026. Debt market flows, in comparison, have remained relatively stable with inflows of around $1 billion.
Foreign institutional investors offloaded equities worth ₹1,042.70 crore on a net basis on Wednesday (May 27), according to exchange data.
“The RBI has already been using several tools to stabilise the rupee, including liquidity operations, forex management measures and steps to curb speculative positions. But if pressure on the currency continues, interest rates could eventually become the next line of defence,” Mr. Pabari said, adding that “the upcoming RBI policy meeting between June 3 and June 5 has become extremely important.”
“As long as global risk sentiment continues improving and crude oil prices remain under control, the rupee could gradually appreciate toward the 94.50–94.80 region in the near term.
“Any cautious signal from the RBI could further strengthen that recovery by improving investor confidence and attracting flows back into the system,” he said.
Published – May 29, 2026 10:32 am IST
