Fresh discussions around possible policy measures to stabilise the currency, including a potential interest rate hike, according to Bloomberg reporting and recent market developments. Meanwhile, the Indian rupee recovered sharply on Thursday, May 21, after likely intervention by the Reserve Bank of India (RBI) and a correction in crude oil prices helped improve sentiment in the currency market.
The rupee was quoting near 96.75 against the US dollar in early interbank trade before recovering to around 96.20, according to traders cited by Reuters. The domestic currency had settled at a record low of 96.82 on Wednesday after remaining under pressure for nine straight sessions.
Traders said the sharp recovery was likely driven by dollar-selling intervention from the RBI aimed at stabilising the rupee after repeated record lows in recent sessions.
USDINR futures were trading near 96.59 on Thursday morning, up 0.18%.
The rupee has weakened sharply in recent sessions due to elevated crude oil prices, rising US Treasury yields, geopolitical tensions linked to the Iran conflict, and continued pressure on emerging market currencies globally.
As of May 2026, the Reserve Bank of India (RBI) has already deployed several measures to stabilise the currency market. These include aggressive dollar-selling intervention in the forex market, dollar-rupee swap operations, and restrictions on speculative offshore currency positions.
The RBI recently announced a $5 billion dollar/rupee buy-sell swap auction aimed at improving liquidity conditions and reducing volatility in forward premiums.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Currency and financial markets are subject to market risks and global developments.