The rupee was at 86.7625 against the U.S. dollar as of 09:45 a.m. IST, up 0.1%.
The “market volatility appears to have cooled off a bit now,” a trader at a state-run bank said, referring to last week’s sharp moves in the rupee.
The currency fell to a record low of 87.95 last Monday before recovering sharply to as high as 86.46 on the back of heavy central bank intervention.
The rupee’s 1-month implied volatility, a gauge of future expectations, eased to 3.4% on Monday, down from a near four-week high of 4.2% hit last week.
Meanwhile, Asian currencies were mostly stronger on the day, rising by 0.1%-0.3%, due to a broadly weaker dollar after U.S. retail sales fell more than expected in January and as reciprocal U.S. trade tariffs have been delayed. “In Asia, India continues to stand out as the most vulnerable to reciprocal tariffs, notwithstanding the good personal relationship between PM Modi and President Trump,” MUFG Bank said in a note. “We maintain our cautious view on the Indian Rupee and forecast USD/INR rising further towards 88.50 by year end.”
On Monday, the rupee’s gains were limited by dollar bids from importers and foreign banks, likely on behalf of custodian clients, traders said.
Foreign investors have sold over $11 billion of local stocks, on a net basis, so far this year.
The benchmark Indian equity indexes – the BSE Sensex and Nifty 50 – were down by about 0.5% each on the day.
