Recovering from its lows, the rupee strengthened by 128 paise to reach 93.57 against the dollar. This recovery was observed after the Reserve Bank lowered the limit for banks\' overnight Net Open Positions to $100 million. The Overnight Net Open Position (NOP) refers to the limit defining the maximum foreign exchange exposure banks are permitted to carry after the close of a trading day (i.e., overnight).
The RBI established this new limit through a circular dated March 27, 2026, which banks are required to comply with by April 10. Following this decision, banks may be compelled to reduce their long positions; this action has increased the supply of dollars in the market, thereby providing support to the rupee.
In the interbank forex market, the rupee opened at 93.62 and subsequently strengthened to 93.57. Prior to this, on Friday, the rupee had depreciated by 89 paise to close at a historic low of 94.85.
What do the experts say?
According to Amit Pabari, MD of CR Forex Advisors, the process of banks unwinding their positions is leading to dollar selling in the market, which is providing short-term relief to the rupee. However, this strengthening is driven by technical factors rather than fundamental economic shifts.
Despite this, pressure on the rupee persists. The Dollar Index remains above the 100 mark, signaling the dollar\'s strength on a global scale. Concurrently, crude oil prices remain elevated; for a major oil-importing nation like India, high oil prices increase the demand for dollars, thereby exerting pressure on the rupee.
Brent Crude Prices Dip to $115 Per Barrel
Brent crude is currently trading at approximately $115 per barrel, reflecting a gain of over 2%. Turning to the domestic stock market, the tumbled 1,191.24 points to 72,391.98 in early trade, while the Nifty dropped 349.45 points to reach 22,470.15. According to exchange data, Foreign Institutional Investors (FIIs) sold shares worth Rs 4,367.30 crore on a net basis on Friday.
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