The Indian rupee gained over 40 paise against the US dollar on Monday, February 2, following a possible intervention by the Reserve Bank of India (RBI) to shore up the domestic unit.
The forex market opened for trading after a two-day weekend holiday during which the Union Budget, presented by the Finance Minister in the parliament on February 1, announced a higher-than-expected government borrowing programme.
The government will gross borrow ₹17.2 lakh crore in the upcoming financial year (2026–27), which will be 17% higher than the current fiscal year’s ₹14.61 lakh crore. However, FY27 fiscal deficit is set at 4.3% of GDP, with the debt-to-GDP ratio easing to 55.6%, reinforcing policy credibility.
The rupee appeared on course to open near its all-time low of 91.9875 against the greenback, but the central bank’s intervention helped shore it up to 91.77, a gain of 0.2% from its closing level on Friday, a Reuters report stated. The rupee further strengthened to 91.55.
The rupee slipped to a record low in the closing minutes of Friday’s trading session, ending the month on a fragile note with a 2.3% loss.
For the rupee, the budget offered reassurance, not relief, said Amit Pabrai, MD, CR Forex Advisors.
Key rupee levels to watch
Pabrai sees short-term pressures to persist, but the broader message of fiscal credibility and growth continuity keeps medium-term prospects constructive — especially with India’s REER still looking undervalued, he said.
With USD/INR hovering just below 92, this level now stands as the key near-term pivot, opined the expert, adding that a sustained break above it could open the path toward 92.20–92.50.
However, the story does not end there. RBI support and the disciplined fiscal signals may act as a ceiling, he said, which could help the Indian rupee gradually drift back toward 91.00–91.20 over time.
Ponmudi R, CEO of Enrich Money, said the overall bias for the rupee stays positive.
“While short-term consolidation is visible near the 92.00 handle, the overall bias stays positive. The 91.40–92.50 zone acts as a strong support band, and a sustained move above 92.00–92.20 could trigger gradual upside extension. The firm USD/INR trend continues to amplify MCX bullion prices, even during phases of global profit booking,” he added.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions.
