The rupee strengthened to ₹88.27 per dollar after earlier touching a record low of ₹88.44 in Friday’s trade.
Relief came as U.S. inflation met expectations, reinforcing bets that the Federal Reserve will cut rates soon.
However, heavy foreign portfolio outflows remain a persistent drag on the currency.
Trade tensions with the U.S. also weigh, with tariffs linked to India’s Russian oil purchases creating frict
ion.
Domestic tax cuts announced by New Delhi helped provide some buffer against external shocks.
RBI is believed to have intervened actively to reduce intraday volatility in the forex market.
Emerging market peers too saw gains on the back of dollar weakness, aiding sentiment.
Despite the uptick, analysts warn the rupee remains vulnerable to fresh waves of global risk.
Importers may still face higher costs if the rupee resumes depreciation in the coming weeks.
Traders will track Fed statements and capital flow data to gauge near-term direction.