Rupee breaches 95/USD level: Domestic currency settles at 94.78 against US dollar; check factors

At the interbank foreign exchange, the rupee opened at 93.62 and then gained further ground to 93.57 against the US dollar, registering a gain of 128 paise from its previous close, after the Reserve Bank of India (RBI) brought down the net open position that banks can keep overnight to $100 million.

Through its circular dated March 27, 2026, the RBI capped the Net Open Position (NOP-INR) for banks at $100 million, with compliance required by April 10.

However, it failed to sustain the momentum and fell to an all-time intra-day low of 95.22 against the American currency.

At the end of Monday's trading session, the rupee was quoted at 94.78 (provisional), 7 paise higher than its previous close of 94.85 against the greenback.

On Friday, the rupee slumped by a massive 89 paise to close at a historic low of 94.85 against the US dollar.

Why did INR breach the 95/USD mark

As per a PTI report, forex traders said the USD/INR pair witnessed high volatility and swung 165 paise during intra-day trade as the West Asia crisis entered its 31st day, keeping energy markets nervous.

They added that the USD/INR pair is also facing pressure from the elevated dollar index and crude oil prices. Furthermore, safe-haven demand has been keeping the dollar index firm above the 100-mark, limiting any meaningful recovery in the rupee.

Moreover, rising geopolitical tensions quickly reflected in oil prices, and Brent crude surged as fears of supply disruptions increased, they added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.15% lower at 100.30.

Brent crude, the global oil benchmark, was trading at $114.97 per barrel (bbl), up 2.60%, in futures trade.

Meanwhile, Finance Minister Nirmala Sitharaman on Monday said the country's economic fundamentals are strong, and compared to other emerging market economies, the Indian rupee is "absolutely going fine" against the US dollar.

Since the commencement of the West Asia conflict on February 28, 2026, the rupee has depreciated by 4.1% to close at ₹ 94.82 per USD on March 27, 2026.

Replying to the question, Minister of State for Finance Pankaj Chaudhary said the value of the rupee is market-determined and is influenced by various factors.

"The government and the RBI are keeping a close watch on the value of the rupee," he said.

The rupee depreciated nearly 10% against the US dollar in the current fiscal year.

Indian market

On the domestic equity market front, SENSEX declined by 1,635.67 points to settle at 71,947.55, while the NIFTY50 slumped 488.20 points to 22,331.40.

Foreign institutional investors (FII) sold equities worth ₹4,367.30 crore on a net basis on Friday, according to exchange data.

The top losers in the NIFTY50 index included Bajaj Finance (-4.95%), Shriram Finance (-3.82%), State Bank of India (-3.8%), InterGlobe Aviation (-3.65%) and Kotak Mahindra Bank (-3.59%).

On the contrary, Hindalco (2.46%), Tech Mahindra (1.66%), Coal India (1.13%), ONGC (1.05%) and Power Grid (0.1%) were notable gainers in the NIFTY50 index.