The Indian rupee traded in a narrow range and fell 4 paise to 95.74 against the American currency in early trade on Tuesday. Elevated crude prices and ongoing importer dollar demand weighed on the domestic currency during the session.
At the interbank foreign exchange market, the rupee opened at 95.74, registering a decline of 4 paise from its previous close. On Monday, the rupee had settled with a marginal gain of 1 paisa at 95.70 against the US dollar.
Forex market participants noted that continued intervention by the Reserve Bank of India (RBI) through state-run banks helped prevent a sharper decline. This intervention kept the USD/INR pair in a narrow band despite weakness in Asian equities and renewed geopolitical uncertainty stemming from the United States' escalation of sanctions on Iran.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, stated that the rupee has remained firmly range-bound between approximately ₹95.50 and ₹96.00 over the past two weeks. According to Bhansali, oil companies and the RBI have been buying dollars at the lower end, while the central bank has simultaneously protected the downside for the rupee by selling dollars near the 95.75 level. He added that oil prices and RBI intervention are likely to remain the key near-term drivers for the currency.
Meanwhile, the dollar index, which measures the greenback's strength against a basket of six major currencies, traded at 99.04. This represented an increase of 0.04 per cent, driven by safe-haven demand following the US escalation of sanctions on Iran. However, the dollar remains under pressure from market expectations regarding Treasury bond buybacks.
In the global commodities market, Brent crude—the global oil benchmark—traded higher by 0.30 per cent at $92.45 per barrel in futures trade.
On the domestic market front, benchmark indices opened lower. The Sensex fell 30 points to 77,336.32 in early trade, while the broader Nifty dipped 38.80 points to 24,179.50. Exchange data showed that foreign institutional investors purchased equities worth ₹1,181.66 crore on a net basis on Monday.
On the domestic macroeconomic front, the Reserve Bank of India's special USD-INR forex swap facility for FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCB), and External Commercial Borrowings (ECB) mobilised foreign exchange inflows of $73 billion as of August 21, 2026. This reflects strong backing from Non-Resident Indians (NRIs).
"The current stability of the rupee within a narrow band demonstrates the impact of active central bank intervention amid volatile global crude prices and geopolitical developments. For businesses and startups engaged in international trade or cross-border transactions, monitoring these currency movements and hedging against forex fluctuations remains critical for financial planning." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
