INR vs USD Rate, May 22, 2026: Rupee Extends Gains at 95.90 Helped by RBI Revving Up a Rescue

Mumbai, May 22: The Indian rupee recovered sharply against the U.S. dollar on Friday after the Reserve Bank of India (RBI) reportedly intensified intervention in the foreign exchange market to shield the currency from further weakness.

After opening on a weaker note, the rupee staged a strong rebound, extending gains seen in recent sessions and strengthening past the 96-per-dollar mark for the first time in four trading sessions. Traders attributed the recovery largely to aggressive dollar sales by the RBI through state-run banks. At the time of writing, rupee was up 30 paise at 95.90 versus the dollar.

According to market participants cited by news agency Reuters, the central bank sold more than $2 billion on Thursday alone as it stepped up efforts to curb excessive volatility in the currency market. The intervention came after the rupee touched fresh record lows earlier this week amid rising crude oil prices, persistent importer dollar demand and broad strength in the U.S. dollar.

Dealers said the RBI has increasingly adopted a more forceful strategy in recent sessions, including pre-market intervention aimed at disrupting speculative bearish bets against the rupee. The central bank’s actions helped stabilise sentiment after sharp weakness earlier in the week.

Oil Prices and Global Cues Weigh on Rupee

Pressure on the rupee has intensified due to the recent rally in global crude oil prices following escalating geopolitical tensions involving Iran. Since India imports a significant portion of its crude requirements, higher oil prices tend to widen the trade deficit and increase demand for dollars from refiners and importers.

The rupee has also been hurt by elevated U.S. Treasury yields and a stronger dollar index, which have reduced appetite for emerging market currencies. Foreign portfolio outflows from Indian equities have further added to pressure on the domestic currency.

Despite Friday’s rebound, traders expect volatility to remain elevated in the near term as global energy markets and geopolitical developments continue to dominate investor sentiment.

RBI Unlikely to Aggressively Hike Rates

While market speculation has emerged around the possibility of monetary tightening to defend the rupee, Reuters reported that the RBI is not inclined to sharply raise interest rates solely to support the currency. Policymakers continue to prioritise balancing inflation management with economic growth concerns.

Instead, the central bank is believed to be relying on a combination of foreign exchange intervention, liquidity management measures and steps to encourage foreign inflows. Earlier this week, the RBI announced a $5 billion dollar-rupee swap auction aimed at easing liquidity pressures created by sustained intervention in the currency market.

Analysts said the rupee’s direction in the coming weeks will likely depend on movements in crude oil prices, the trajectory of the U.S. dollar and the RBI’s willingness to continue intervening aggressively to prevent disorderly depreciation.

Source:

• rates from https://www.moneycontrol.com/markets/currencies/