Heading into Tuesday, 13 October 2026, the rupee appeared on course for a second consecutive day of gains against the dollar, with market participants attributing the currency's recent period of stability to steps taken by the Reserve Bank of India.

Trading at ₹95.53 against the dollar at the open, the rupee climbed to ₹94.96 in early deals — a recovery of 82 paise from the previous session's close, market data showed. In the prior session, the rupee edged up by roughly one percent, settling at ₹95.77–₹95.78 to the dollar — a level not seen since approximately six months prior.

RBI policy steps that raised the cost of certain foreign exchange transactions are credited with curbing the appetite for immediate dollar purchases, helping to drive the turnaround. Dollar-selling activity in the foreign exchange market has been attributed to the RBI, based on information that circulated through broadcast media.

Elevated crude oil prices and a retreat of foreign investment have kept the currency under strain. Interventions by the Reserve Bank of India — targeting dollar demand across both spot and derivatives markets — appear to have underpinned the rupee's rebound.

Revised foreign exchange rules took effect through the central bank, targeting a reduction in speculative positioning across currency markets. Three government-owned fuel retailers — Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation — gained access to a dedicated dollar facility, giving each company a structured channel through which to meet its foreign-currency needs rather than turning to the open spot market each time.

Broadcast reports put the facility's capacity to redirect dollar-denominated demand away from spot-market trading at somewhere between ten and twelve billion dollars each month, a figure tied to the volume of oil being brought in. Dollar sales by the central bank formed part of a broader move to stabilise conditions in the foreign exchange market.

A cash reserve requirement imposed by the Reserve Bank of India on certain foreign exchange derivatives — a rule designed to raise the cost of speculative positions and curb such activity — contributed to the rupee's partial recovery from its record trough of ₹96.96 against the dollar, a low touched in May. Cash reserve requirements — tools the RBI had previously confined to foreign currency operations — were extended to cover hedging activity tied to banks' own asset and liability positions as well.

Curbs on the sale of non-deliverable rupee derivative products to overseas clients — channelled through IFSC units and select primary dealers — were also put in place by the RBI. Issuance of these instruments is now restricted to hedging applications alone.

Rupee-linked foreign currency derivative contracts that had been cancelled — whether structured for physical delivery or settled without it — became subject to a new restriction: licensed dealers lost the ability to let clients rebook those voided positions. Curbing speculative activity and pulling back on dollar demand are the twin goals driving the policy package.

Fresh rules in the banking sector have left a portion of lenders navigating an unclear path forward. Uncertainty among dealers over whether the cash margin rule extends to interbank transactions prompted some to withdraw from quoting forward dollar-rupee rates, news reports indicated. According to someone with knowledge of the RBI's position, interbank transactions fell outside the intended scope of the cash margin requirement.

Midway through Tuesday's opening session, the dollar index edged down to 102.43, a retreat of 0.15%. Priced at $105.47 a barrel, Brent crude futures shed roughly 1.11% of their value when markets opened.

Exchange data show that overseas institutional investors offloaded Indian equities worth ₹1,708.48 crore on a net basis when markets closed on Monday. Available data puts foreign capital withdrawals at over $30 billion through the first portion of 2026. Taken together, capital outflows and the cost of importing crude oil have weighed on both the rupee and India's balance of payments.