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The rupee pared initial losses and settled for the day with gains of 26 paise at 95.17 (provisional) against the U.S. dollar on Monday (August 31, 2026), on possible RBI intervention, as rising crude oil prices and geopolitical strain weighed on the local unit.
Forex traders said the Reserve Bank of India (RBI) might have intervened to support the currency at lower levels after market participants raised the probability of a rate hike by the U.S. Federal Reserve in September, pushing U.S. Treasury yields higher and triggering a broad dollar rally.
At the interbank foreign exchange, the rupee opened at 95.56 and oscillated between 95.11 and 95.56 during the session. At the end of Monday’s trading session, the rupee was quoted at 95.17 (provisional), higher by 26 paise from its previous close.
On Friday (August 28, 2026), the rupee rose marginally by 2 paise to settle at 95.43 against the U.S. dollar.
“The Indian rupee staged a stellar two-day comeback to close at its strongest level since August 5, successfully overcoming an early dip triggered by Friday’s surge in the dollar index following hawkish remarks from Fed chair…
“This resilient recovery was heavily anchored by timely, suspected intervention from the Reserve Bank of India alongside a surge in dollar flows linked to the MSCI rebalancing and the FCNR (B) schemes,” said Dilip Parmar, Senior Research Analyst, HDFC Securities.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.52, lower by 0.18%.
Brent crude, the global oil benchmark, was trading higher by 3.70% at $91.36 per barrel in futures trade, driven by a renewed Middle East supply-risk premium after the U.S. strike on Iran’s Larak Island and subsequent Iranian retaliation, raising fresh concerns about oil flows through the Strait of Hormuz.
Forex traders said the RBI is intervening in the market to stem any significant depreciation in the rupee. Moreover, better-than-expected flows under the FCNR(B) scheme also boosted investor sentiments.
The Reserve Bank of India’s special USD-INR forex swap facility for FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCB) and External Commercial Borrowings (ECB) has mobilised foreign exchange inflows of $73 billion as of August 21, 2026, reflecting strong backing from Non-Resident Indians (NRIs). August 31 is the last day for mobilisation of deposits under the RBIs FCNR (B) scheme.
On the domestic equities market front, the Sensex declined 307.24 points to settle at 76,957.27, while the Nifty dropped 95.25 points to 24,080.40.
Foreign institutional investors offloaded equities worth ₹5,039.80 crore on a net basis on Friday (August 28, 2026), according to exchange data.
India’s forex reserves jumped $12.422 billion to a new all-time high of $729.328 billion during the week ended August 21, the RBI said on Friday (August 28, 2026).
Meanwhile, the Commerce Ministry will hold a meeting with industry associations and representatives of export promotion councils on September 1 on India-U.S. trade performance.
The meeting will be chaired by the Additional Secretary in the Ministry, Darpan Jain. He is also the country’s chief negotiator for the India-U.S. bilateral trade agreement.
Published – August 31, 2026 04:48 pm IST
