RBI support drives rupee’s sharp July 27 rebound

The Indian rupee strengthened notably in early trade on Monday, July 27, marking one of its most pronounced daily advances in over a month. The currency opened at about 96.18 per US dollar and was quoted around 96.25 shortly thereafter. This represented an improvement of roughly 28 paise compared with the previous close, with outlets describing a similarly sized gain. Trading levels near 96.28 were also reported during the early session, underscoring the scale of the intraday recovery.

The move reversed part of the rupee’s recent weakness against the dollar and drew attention because of its relative size compared with daily fluctuations in prior weeks. Market participants framed the advance as a response to a combination of domestic policy support and easing external pressures. While the trading session was still in progress, the early performance signalled a stronger tone for the currency than had been seen in recent days.

A key factor cited for the rupee’s improvement was support from the Reserve Bank of India. The central bank’s involvement in the foreign-exchange market was seen as helping to limit excessive volatility and stabilise sentiment. Reports highlighted that policy steps announced in June to mobilise more dollars have attracted nearly $32 billion of inflows so far. These inflows were described as bolstering the RBI’s capacity to manage liquidity and intervene when needed.

The scale of these dollar inflows has been important for the rupee’s backdrop, as they expand the pool of foreign currency available to the financial system. Market commentary suggested that this additional buffer gives the central bank more scope to lean against sharp moves in the exchange rate. In the July 27 session, that support appeared to translate into greater confidence among participants, reinforcing the day’s gains in the rupee.

External conditions also shifted in favour of the rupee at the start of the week. Brent crude futures (UKOIL) fell by roughly 4%, leaving prices around $92.7–$93.0 per barrel. The decline followed reports of a pause in strikes between the United States and Iran, which eased some immediate concerns over supply disruptions. Lower oil prices can reduce pressure on oil-importing economies, and this drop was viewed as a supportive factor for India’s currency.

The combination of softer crude prices and policy-backed inflows created a more constructive setting for the rupee on July 27. With energy costs a significant driver of India’s import bill, the retreat in Brent futures (UKOIL) lessened one key headwind that had weighed on the currency. Together with the RBI’s enhanced ability to smooth market moves, these developments helped deliver the rupee’s strongest near-term upswing in several weeks.