The rupee gained 9 paise to 95.65 against the U.S. dollar in early trade on Friday (August 21, 2026), supported by the weakening of the American currency in the overseas markets.

Forex traders said for India, a softer dollar is being offset by another challenge elevated crude oil prices.

Meanwhile, RBI Governor Sanjay Malhotra has indicated that the central bank expects at least $80 billion in foreign currency inflows.

According to forex traders, while the RBI Governor’s statement offered some reassurance, elevated oil prices, persistent geopolitical uncertainty, and a structurally reduced foreign presence continue to neutralise fresh dollar inflows.

At the interbank foreign exchange, the rupee opened at 95.69, then rose to 95.65, higher by 9 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.

“Governor Sanjay Malhotra indicated that the central bank expects at least $80 billion of foreign currency inflows from the measures announced earlier this year to attract dollars into India. So far, around $56.85 billion has already been mobilised, including $52.3 billion through FCNR(B) deposits,” CR Forex Advisors MD, Amit Pabari said.

However, unlike the famous FCNR(B) scheme of 2013, which sparked an immediate double-digit appreciation in the rupee, this year’s inflows have not translated into meaningful currency strength. Since the RBI announced these measures in June, the rupee has barely responded, Mr. Pabari added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.15% at 98.74, its lowest level since May.

Brent crude, the global oil benchmark, was trading lower by 0.23% at $93.56 per barrel in futures trading, as the geopolitical situation in the Middle East remains tense, with fresh warnings from U.S. President Donald Trump to countries supporting Iran.

“The conflict has already disrupted more than 20% of the region’s refining capacity, while the Strait of Hormuz remains shut, restricting fuel exports from one of the world’s most important energy routes,” Mr. Pabari added.

On the domestic market front, Sensex was trading lower by 25.97 points to 77,506.51 in early trade, while the Nifty skid 5.75 points to 24,223.10.

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

The rupee depreciated 10 paise to close at 95.29 (provisional) against the U.S. dollar on Tuesday (June 2, 2026), as global crude oil prices jumped and the American currency remained firm amid massive safe-haven inflows.

Forex traders said significant foreign fund outflows also weighed on the investor sentiments.

At the interbank foreign exchange market, the rupee opened at 95.16 against the U.S. dollar, then touched an intraday high of 95.03 and a low of 95.31.

At the end of Tuesday’s (June 2, 2026) trading session, the rupee was quoted at 95.29 (provisional), down 10 paise from its previous close.

On Monday (June 1, 2026), the rupee depreciated 34 paise to close at 95.19 against the U.S. dollar.

“We expect the rupee to trade with a negative bias on renewed geopolitical tensions and a surge in crude oil prices. Strength in the dollar may also put pressure on the rupee. However, continued peace talks may prevent a sharp fall,” said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.

Investors may watch out for the Reserve Bank of India (RBI) monetary policy this week, Mr. Choudhary said, adding that the USD-INR spot price is expected to trade in a range of 94.90 to 95.50.

The RBI Monetary Policy Committee meeting is scheduled for June 3-5. The six-member MPC, headed by RBI Governor Sanjay Malhotra, will announce its decision on June 5.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.12, down 0.08%.

Brent crude, the global oil benchmark, was trading lower by 1.66% at $93.40 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 382.50 points to settle at 74,649.84, while the Nifty gained 100.95 points to 23,483.55.

Foreign institutional investors offloaded equities worth ₹3,911.68 crore on a net basis on Monday (June 1, 2026), according to exchange data.

On the domestic macroeconomic front, India’s industrial production expanded by 4.9 per cent in April, while manufacturing output grew 6.2%.

Moreover, according to the latest data released by the Controller General of Accounts on Monday (June 1, 2026), the government successfully met its fiscal deficit target of 4.4% of GDP for FY26, exactly matching its budget estimate.

Meanwhile, U.S. President Donald Trump on Monday (June 2, 2026) said talks were continuing with Iran at a rapid pace.

Mr. Trump also said that he has persuaded Prime Minister Benjamin Netanyahu to call off the strike on Beirut, following which the Israeli leader “turned his troops around”.