The rupee strengthened to 94.96 per dollar on Tuesday, its best rate since early October, after rising 82 paise from its 95.53 opening in the interbank market.
RBI tightened forex rules Saturday, announcing a dedicated dollar window for oil marketing companies, higher hedging costs, a 20% reserve requirement for dollar purchases over $2 million, and a ban on rebooking cancelled derivative contracts.
Forex traders expect the new rules to reduce dollar demand in the spot market, with the dollar index slipping 0.15% to 102.43 and Brent crude falling 1.11% to $105.47 per barrel.
Meanwhile, the BSE Sensex gained over 600 points to 72,584.50 and NSE Nifty advanced 200 points to 22,575.30, even as foreign institutional investors net sold Rs 1,708.48 crore.
Government data revealed retail inflation at 5.54% in September, largely driven by higher onion and food prices, yet it remains within the RBI’s tolerance band.