Rupee surged to a two-month high against the U.S. dollar on Tuesday, powered by aggressive central bank intervention and supported by flow-related dollar offers from foreign banks.
The rupee settled above the 95 to the dollar mark for the first time in two months, defying a selloff in Asian currencies triggered by a global bond rout that deepened with Japan’s benchmark bond yield hitting the key 3% barrier for the first time in 30 years.
“The rupee strengthened significantly in today’s session, reflecting continued RBI dollar-selling intervention and flow-related dollar supply, while yesterday’s strong growth data has also improved sentiment toward the currency,” said Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors.
The currency ended at 94.9500, up 0.2% from the previous close, notching its third consecutive daily rise.
Inflows toward a state-backed infrastructure fund also aided, traders said.
The Reserve Bank of India, which has been a heavy presence in the forex market in recent sessions, sold dollars again through state-run banks, propelling the rupee higher even as Asian peers fell between 0.2% and 5.2%.
Treasuries sold off, with the 10-year yield spiking to a its highest since January 2025, as traders ramped have up bets on a U.S. rate hike this month amid inflation concerns.
U.S. President Donald Trump threatened further strikes against Iran on Monday after the first exchange of direct attacks in a month, raising tensions in a conflict that had recently shifted into an economic standoff.
Brent crude was 2% higher at $92.25 per barrel in Asian trade.
Finrex’s Bhansali said Brent and higher global yields limited the rupee’s upside and expects the currency to trade in the 94.75 to 95.25 range in the near term.
The Indian central bank’s currency intervention has led to increased market focus on its ballooning FX forward book, which hit an all-time high of nearly $137 billion in July.
Published on September 1, 2026
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