The Indian rupee posted its biggest gain in nearly four months on Wednesday, rebounding from near-record lows as optimism grew over a potential trade agreement with the United States. The currency rose as much as 0.9% to 87.9987 per dollar before trimming some of its gains, after having weakened to 88.8025 per dollar in the previous session.
The rally followed a Bloomberg News report that India is fast-tracking trade negotiations with the US, aiming to conclude a deal by next month. Investors also reacted to a weaker US dollar, driven by expectations of interest rate cuts by the Federal Reserve, which bolstered the rupee along with other Asian currencies.
Analysts said the Reserve Bank of India’s recent interventions around the 88.80 per dollar level indicated the central bank’s intent to prevent the rupee from weakening too sharply in the near term. Michael Wan, senior currency analyst at MUFG Bank, noted that the combination of trade deal hopes, RBI intervention, and a broadly weaker dollar contributed to the rupee’s rebound.
Wan added that if the rupee can sustain gains above the 88.10 per dollar level, it could extend further toward the 87 mark, signaling renewed confidence in the currency amid a favorable policy and global environment.
