Rupee recovers from record low level

Mumbai, Aug : The rupee rebounded from record low level and closed 16 paise higher at 87.72 against the US dollar on Wednesday, supported by a volatile greenback and the Reserve Bank’s decision to hold interest rate steady.

However, increasing crude oil prices, negative domestic equity markets, and uncertainties around the US tariff on India restricted gains in the local unit, according to forex traders.

At the interbank foreign exchange, the domestic unit opened at 87.72 and moved in a range of 87.63-87.80 during the day before settling at 87.72, up 16 paise from its previous close.

On Tuesday, the rupee lost 22 paise to close at a fresh all-time low of 87.88 against the US dollar. Its previous lowest closing level of 87.80 was recorded on July 30. The unit also revisited its lowest-ever intra-day level of 87.95 against the dollar, seen previously on February 10 this year.

After three successive interest rate cuts, the Reserve Bank of India (RBI) on Wednesday decided to keep policy rate unchanged at 5.5 per cent and retained the neutral stance, amid concerns over tariff uncertainties.

Announcing the third bi-monthly monetary policy of the current fiscal, RBI Governor Sanjay Malhotra said the growth rate projection for FY26 has been retained at 6.5 per cent.

“The rupee was in the narrow range with RBI protecting one end and FPIs buying for their dollar outflows, along with oil companies, before the due date of US secondary sanctions on Russia day after tomorrow (Friday),” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

“We wait for the penal tariffs US applies on India for purchasing oil from Russia as the rupee traverses through a narrow path today with something positive in the mind. For tomorrow, we expect rupee in the range of 87.25/88.00,” he said.