Rupee Rebound: The Indian rupee surprised everyone in the market on Monday. Its sharp fall the previous trading day had unnerved traders and investors, but a sudden surge changed the mood. Closing at 89.20, a gain of 46 paise against the dollar, signaled renewed hope in the market, reviving confidence.
A strong rebound after the decline transformed market sentiment
Last week, the rupee recorded a historic fall of 98 paise, deepening concerns in the market. Demand for the US dollar, a decline in foreign investment, and trade negotiation complications weakened the rupee. However, Monday’s strength brought relief to investors and played a major role in restoring market confidence.
Did the RBI really intervene in the market?
| Factor / Data | Value / Details |
|---|---|
| Latest Rupee Closing Rate | ₹89.20 per US Dollar |
| Previous Closing Rate | ₹89.66 per US Dollar |
| Intraday Jump | 46 Paise Gain |
| Reason for Previous Fall | High dollar demand, weak trade sentiment, market sell-off |
| RBI Intervention | Likely intervention in Interbank & NDF Market |
| Rupee Performance in 2025 | Over 4% weaker overall |
| Key Pressure Factors | Low portfolio inflows, unresolved US-India trade talks |
| Market Sentiment After Rebound | Improved confidence, reduced volatility |
| Future Movement Depends On | FII inflow, crude oil prices, global policy shifts |
Traders believe that the Reserve Bank of India intervened in the interbank foreign exchange market and the non-deliverable forward market. The bank did not directly try to strengthen the rupee, but only took steps to curb excessive volatility. This maintained currency stability and provided controlled support to the market.
Why is the rupee still expected to weaken in 2025?
🚨Rupee rises 39 paise to 84.18 against U.S. dollar in early trade pic.twitter.com/YqLw6vypcN
— India & The World (@IndianInfoGuid) May 5, 2025
Despite Monday’s rally, the Indian rupee is still projected to weaken by more than four percent in 2025. Uncertainty in foreign trade, declining investment flows, and unfinished trade talks between the US and India are the main reasons for this. Global economic conditions are also continuously exerting pressure, making the rupee’s movements volatile.
The RBI’s policy focus is on maintaining stability, not direct strengthening
The RBI’s approach has always been based on stability, not intervention. The central bank only gets involved when volatility disrupts market balance. This was evident on Monday, where the RBI’s strategy saved the rupee from falling. This sent a message that the economy can move forward steadily even during times of crisis.
What conditions will the rupee’s future move depend on?
The direction the rupee takes in the coming days will depend on several factors. The trend of foreign investment, the state of the dollar index, crude oil prices, and global economic policies will determine its future. While this surge has brought some relief to the market, it’s crucial to continue monitoring the situation.
FAQs
Q1. Why did the Indian rupee rebound in the market?
The rupee rebounded due to RBI’s likely intervention and reduced volatility.
Q2. What was the closing value of the rupee after the rebound?
The rupee closed at 89.20 per US dollar.
Q3. Why had the rupee fallen sharply earlier?
High dollar demand, weak trade sentiment, and market sell-off caused the fall.
Q4. Has the rupee remained weak in 2025 overall?
Yes, the rupee is still over 4 percent down in 2025.
Q5. What will decide the rupee’s next movement?
FII inflows, global trade conditions, and crude oil prices will influence direction.
Disclaimer: The information provided in this article is for awareness and general market updates only. It does not constitute investment advice. Please consult your financial advisor before making any financial decisions.
