Mumbai, March 30 The rupee recovered 128 paise from its all-time low of 93.57 against the US dollar in early trade on Monday, after the Reserve Bank reduced the net open position that banks can hold overnight to USD 100 million.
Forex traders said the rupee opened stronger as banks, who typically have long positions, may need to reduce their positions in the onshore currency markets, as per the RBI Director.
Through its circular dated March 27, 2026, the RBI capped the Net Open Position (NOP-INR) for banks at USD 100 million, with compliance required by April 10.
At the interbank foreign exchange, the rupee opened at 93.62 and then gained further ground to 93.57 against the US dollar, registering a gain of 128 paise from its previous close.
On Friday, the rupee slumped by a massive 89 paise to close at a historic low of 94.85 against the US dollar.
"As banks begin adjusting their positions, they are likely to sell dollars in the market, which can temporarily support the rupee. This creates a phase of relief, driven by position unwinding, not by a major shift in fundamentals, but still meaningful in the near term," CR Forex Advisors MD Amit Pabari said.
However, the USD/INR pair is facing pressure from the elevated dollar index and crude oil prices. Demand for the dollar index, which remains firm above the 100 mark, is limiting any meaningful recovery in the rupee, forex traders said.
Meanwhile, the dollar index, which gauges the strength of the greenback against a basket of six currencies, was trading 0.06 per cent lower at 100.09.
Brent crude, the global oil benchmark, was trading at USD 115 per barrel, up 2.16 per cent, in futures trade.
Geopolitical tensions quickly reflected in oil prices. Crude surged as fears of supply disruptions increased. "For India, this is critical. Being a major oil importer, higher oil prices increase dollar demand, which directly puts pressure on the rupee," Pabari said.
The overall picture for the rupee remains delicate, with rising oil prices, ongoing geopolitical tensions, and a strong dollar environment continuing to keep pressure on the currency, he added.
On the domestic equity market front, the Sensex tumbled 1,191.24 points to 72,391.98 in early trade, while the Nifty slumped 349.45 points to 22,470.15.
Foreign institutional investors sold equities worth Rs 4,367.30 crore on a net basis on Friday, according to exchange data.