Rupee posts biggest one-day gain in 12 years after RBI crackdown on speculation

New Delhi (The Uttam Hindu): The Indian rupee strengthened sharply on Thursday, registering its biggest single-day gain in more than 12 years. The surge came after the Reserve Bank of India (RBI) intensified its crackdown on currency speculation by extending restrictions on the offshore derivatives market.

After trading resumed following a three-day break, the rupee appreciated by up to 1.7% against the US dollar, reaching 93.25—its strongest one-day jump since September 2013. This rise came even as most Asian currencies remained under pressure. At the same time, rising tensions in West Asia, highlighted by statements from Donald Trump, weighed on global markets.

In the commodity market, crude oil prices surged significantly. Brent crude rose 5.24% to $106.47 per barrel, while US WTI crude climbed 4.5% to $104.64 per barrel. Asian stock markets also saw declines, with indices like Nikkei, Hang Seng, and Kospi falling by up to 3%. Indian equity markets opened weak as well, with Sensex and Nifty dropping nearly 2% in early trade.

Currency markets had remained closed earlier in the week due to holidays, including Mahavir Jayanti and the start of the new financial year, and were also set to remain shut on Good Friday.

As part of its measures, the RBI has barred banks from offering rupee-related non-deliverable forward (NDF) contracts. It has also restricted companies from rebooking cancelled forward contracts. Earlier, the central bank had imposed a $100 million cap on banks’ net open rupee positions and prohibited them from entering into foreign exchange derivative contracts with related parties.

According to reports, India holds foreign exchange reserves of over $700 billion, which provides sufficient buffer to curb speculative activity and stabilize the rupee when needed.