Indian Rupee Strengthens on RBI Curbs

Mumbai, India - The Indian rupee strengthened against the US dollar on Monday, building on a sharp rally from Thursday as the Reserve Bank of India implemented measures to limit speculative trading and stabilize the currency. The local unit opened around 93.13 and climbed to an intraday high near 92.79 before settling higher, with traders citing the central bank's actions as a key driver amid persistent global headwinds.

The rupee's advance followed one of its largest single-day gains in over a decade on Thursday, when it rose more than 1.5 percent to close around 93.18, prompted by the RBI's regulatory steps. Those included capping banks' net open foreign exchange positions at $100 million by the end of each business day, with compliance required by April 10. The central bank also prohibited banks from offering rupee nondeliverable forwards to clients and restricted companies from rebooking canceled forward contracts. These moves aimed to reduce arbitrage between onshore and offshore markets and prevent excessive volatility.

Forex traders noted that the measures prompted banks and importers to unwind dollar positions, boosting demand for the rupee in early trade. However, gains...