The rupee pared initial gains and settled on a flat note, higher by just 3 paise at 95.71 (provisional) against the U.S. dollar on Friday (August 21, 2026), as the support from a weak dollar was negated by continued geopolitical tensions.

Forex traders said the Indian rupee traded flat to positive on a weak dollar and a positive tone in the domestic markets. However, the rupee pared initial gains as geopolitical tensions continue to simmer.

At the interbank foreign exchange, the rupee opened at 95.69, then touched an intraday high of 95.65 and a low of 95.75 and finally settled for the day at 95.71 (provisional) against the greenback, higher by 3 paise from its previous close.

On Thursday (August 20, 2026), the rupee pared initial gains and settled for the day down 1 paisa at 95.74 against the U.S. dollar.

“We expect the rupee to trade with a slight negative bias as geopolitical tensions between the U.S. and Iran continue amid talks of crushing economic sanctions against Iran by the U.S. administration.

“Elevated crude oil prices may also pressurise the rupee. However, a falling US dollar amid diminishing rate hike expectations may support the rupee at lower levels. Traders may take cues from services PMI data from the U.S.,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

According to Choudhary, USD-INR spot price is expected to trade in a range of 95.50 to 96.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.25% at 98.65.

Brent crude, the global oil benchmark, was trading lower by 0.42% at $93.39 per barrel in futures trade, as the geopolitical situation in West Asia remains tense, with fresh warnings from U.S. President Donald Trump to countries supporting Iran.

On the domestic market front, Sensex edged up 3.11 points to settle at 77,540.83, while the Nifty settled 20.15 points higher at 24,252.

Foreign institutional investors offloaded equities worth ₹583.36 crore on a net basis on Thursday (August 20, 2026), according to exchange data.

On the domestic macroeconomic front, the government on Thursday (August 20, 2026) amended certain provisions of the Foreign Trade Policy to make it easier for exporters to invoice overseas sales and receive payments in Indian rupees.

The amendments cover exports to all countries, although the rules vary by destination.

For countries outside the Asian Clearing Union (ACU), export contracts and invoices may now be denominated in any foreign currency or Indian rupees.

Earlier, export earnings generally had to be received in a freely convertible currency.

The rupee appreciated 14 paise to close at 95.27 (provisional) against the U.S. dollar on Wednesday (June 10, 2026), amid likely intervention from the Reserve Bank of India (RBI) to curb excessive volatility and prevent a further slide in the domestic unit.

Forex traders said the rupee pared its initial losses and settled on a positive note as Brent crude oil prices and the U.S. dollar index retreated from their elevated levels. Moreover, likely intervention from the Reserve Bank of India (RBI) also supported the domestic unit at lower levels.

At the interbank foreign exchange market, the rupee opened at 95.52, then touched an intraday high of 95.07 and a low of 95.56 against the U.S. dollar. The rupee finally ended the session at 95.27 (provisional), registering a rise of 14 paise from its previous close.

On Tuesday (June 9, 2026), the rupee appreciated 20 paise to close at 95.41 against the U.S. dollar. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.87, down 0.04%.

Brent crude, the global oil benchmark, was trading lower by 0.32% at $91.16 per barrel in futures trade. Forex traders said the rupee steadied as markets await U.S. CPI data amid escalating U.S.-Iran tensions.

According to traders, the Indian rupee remains under severe pressure due to renewed geopolitical tensions in West Asia. As India heavily relies on energy imports, any spike in global crude oil prices directly widens the trade deficit and weakens the domestic currency, they said.

The United States launched retaliatory strikes against Iran after an American Apache helicopter was downed near the Strait of Hormuz.

In response, Iran’s Islamic Revolutionary Guard Corps (IRGC) launched retaliatory drone and long-range missile strikes targeting U.S. facilities across the region.

On the domestic equity market front, Sensex was marginally up 64.42 points and settled at 73,983.18, while the Nifty skidded 27.15 points to close at 23,214.95. Foreign institutional investors offloaded equities worth ₹4,566.03 crore on a net basis on Tuesday (June 9, 2026), according to exchange data.

Meanwhile, Indian government bond yields dropped sharply in the last four days, with the benchmark 10-year yield falling 0.10%, as foreign portfolio investor (FPI) inflows picked up after the government’s recent tax relief measures for debt investments.

Money market experts attributed the easing yields on government securities to heavy inflows of ₹11,026.331 crore in the last four days by foreign investors in these securities under the Fully Accessible Route (FAR). FAR allows non-resident investors to invest in specified Government of India dated securities without any investment ceilings.