The rupee surged 96 paise to ₹95.77 per dollar on Monday, the strongest rally since April 2 when it leapt 124 paise.
The uptick followed fresh RBI curbs aimed at dampening dollar demand and speculative positions, even as banks lobby for clearer compliance guidance.
Banks flagged the cost of extra reserves parked with the RBI and the need for a systematic reporting cadence, citing higher interest on surplus balances.
Bond yields mirrored the tightening, with the 10‑year rupee yield climbing to 7.39%, a 0.2‑point jump that signals market concern over potential further monetary tightening.
The rupee has weakened 6.5% year‑to‑date, weighed by a widening trade deficit, persistent oil price inflation, and capital outflows. Yet the recent gain, the largest in six months, offers a temporary reprieve.
Moving forward, RBI has rolled out a 99% reserve requirement for banks during the first fortnight of the new regime, up from 90%. Market watchers will be watching the next RBI policy meeting and the evolving trajectory of global commodity prices for clues on the currency’s durability.