The Indian rupee firmed on Monday, recovering sharply from record lows of nearly 97 hit last week after Reserve Bank of India Governor Sanjay Malhotra warned of more intervention support.
The rupee’s USD/INR pair, which gauges the number of rupees required to buy one dollar, fell 0.5% to 95.70 rupees in morning trade. The pair had risen to nearly 97 rupees last week.
The RBI was seen intervening in currency markets last week to support the rupee, pulling the USDINR pair off record highs.
Speaking to the Mint newspaper, Malhotra said the rupee appeared to be undervalued, and that the RBI will do “whatever is required” to stem further weakness in the currency.
On Monday, the rupee was also aided by sharp declines in oil prices, after developments over the weekend pointed to some progress towards a U.S.-Iran peace deal.
High oil prices were a major weight on the rupee since the onset of the Iran war, given India’s heavy reliance on crude imports.
The rupee was among the worst-performing global currencies since late-February, having lost about 6% since the onset of the war.
Sustained weakness in the rupee had spurred some speculation over whether the RBI would hike interest rates. But Malhotra ruled out such measures.
