The Indian rupee sees biggest single-day surge in 12 years as the currency rose sharply against the US dollar following fresh measures by the Reserve Bank of India aimed at curbing speculative activity in currency markets.

Key Highlights

• Indian rupee posts biggest single-day gain in 12 years after RBI curbs speculation.
• RBI measures restrict NDF contracts, boosting rupee strength and stabilising currency markets significantly.

The Indian rupee's biggest single-day surge in 12 years comes amid the central bank’s decisive steps to restrict non-deliverable forward (NDF) contracts and tighten liquidity conditions, boosting investor confidence and strengthening the domestic currency.

The rupee appreciated significantly during the trading session, marking its strongest one-day performance in over a decade. Analysts attribute the rally to the RBI’s intervention, which forced banks to unwind speculative positions and increase dollar supply in the domestic market.

The central bank recently barred authorised dealers from offering rupee NDF contracts to both resident and non-resident users, a move aimed at reducing arbitrage opportunities between offshore and onshore markets. This step is expected to stabilise the rupee amid global volatility and geopolitical tensions impacting currency markets.

Also Read: RBI Introduces Fresh Measures to Stabilize the Indian Rupee

Market experts noted that the RBI’s measures have helped restore confidence in the currency, especially after recent depreciation pressures driven by rising crude oil prices and global economic uncertainty. The rupee had been under pressure due to India’s high dependence on energy imports and capital outflows in volatile markets.

In addition, the RBI has imposed tighter norms on foreign exchange derivative contracts, including restrictions on rebooking cancelled contracts and transactions with related parties. These steps are aimed at strengthening regulatory oversight and limiting excessive speculation.

Despite the sharp appreciation, analysts caution that the rupee’s trajectory will continue to depend on global factors such as oil prices, US monetary policy, and geopolitical developments, particularly in West Asia.