Rupee gains 28 paise to close at 94.94 against U.S. dollar

The rupee gained 28 paise to close at nearly two-month high of 94.94 (provisional) against the U.S. dollar on Tuesday (September 1, 2026) on robust domestic growth, controlled fiscal slippage and portfolio-related inflows.

Forex traders said recent MSCI-linked inflows are offering temporary support to the rupee.

Moreover, the Reserve Bank of India (RBI) might have intervened to support the domestic currency, they said.

At the interbank foreign exchange market, the rupee opened at 95.06 and touched an intraday high of 94.79 and a low of 95.10 during the session.

At the end of Tuesday’s trading session, the rupee was quoted at 94.94 (provisional), higher by 28 paise from its previous close.

On Monday, the rupee settled 21 paise higher at 95.22 against the U.S. dollar.

“The Indian rupee gained on possible intervention by the RBI and upbeat macroeconomic data. However, weak domestic markets and a surge in crude oil prices capped sharp gains,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.58, higher by 0.15%.

Brent crude, the global oil benchmark, was trading higher by 1.97% at $92.27 per barrel in futures trade.

“We expect the rupee to trade with a slight negative bias amid rising crude oil prices on the back of renewed geopolitical tensions between the U.S. and Iran. Hawkish comments from Fed Chair Kevin Warsh may also pressurise the rupee.

“However, any de-escalation of tensions may support the rupee at lower levels. Traders may take cues from ISM manufacturing PMI and JOLTS job openings data from the U.S.,” Mr. Choudhary said, adding that the USDINR spot price is expected to trade in a range of 94.65 to 95.25.

On the domestic equities market front, Sensex dipped 12.99 points to settle at 76,944.28, while Nifty fell 24.60 points to 24,055.80.

Foreign institutional investors offloaded equities worth ₹7,985.88 crore on a net basis on Monday, according to exchange data.

FPIs invested around $3.1 billion in August, their strongest monthly inflow in 23 months and the second consecutive month of net buying.

However, foreign investors remain net sellers of around $24.6 billion so far in 2026.

On the macroeconomic front, India’s economy grew at a faster-than-expected 7.8% in the April-June quarter, showing resilience in the face of concerns that the war in Iran and resulting global economic uncertainty could weigh on growth.

Meanwhile, the central government’s fiscal deficit for 2026-27 stood at 26.8% of the full-year target at the end of July, according to data released by the Controller General of Accounts (CGA) on Monday.

The deficit was at 29.9% of Budget Estimates (BE) of 2025-26 for the first four months of the previous financial year.