INR surges 1%, marking biggest rally in over 2 years
What's the story
The Indian rupee witnessed its biggest rally in over two years, recovering the 87 mark against the US dollar on February 11.
The recovery comes on the back of possible intervention by the Reserve Bank of India (RBI).
The rupee opened at 87.35 against the US dollar and then strengthened to 87.0750, against its previous close of 87.48.
The nearly 1% rise is the biggest since November 2022, making it Asia's top performer on Tuesday.
Stabilization efforts
RBI's intervention stabilizes rupee amid new US tariffs
On February 10, the Indian rupee fell to a new low of 87.9563 against the US dollar after US President Donald Trump announced new tariff plans.
However, heavy intervention by the RBI managed to stabilize the local currency.
"The RBI has been heavily intervening since yesterday morning to support the rupee," Anindya Banerjee, a currency strategist at Kotak Securities, told Bloomberg.
Diplomatic influence
PM Modi's US visit could impact rupee's performance
Prime Minister Narendra Modi's two-day visit to the US on February 12 and 13, could also impact the rupee's performance.
The PM has said his trip will be an opportunity to build on the previous successes with Trump and develop an agenda for strengthening bilateral ties in technology, trade, defense, energy, and supply chain resilience.
Early gains
Rupee's early recovery on February 11
The rupee staged a remarkable 72 paise recovery against the dollar in early trade on February 11, possibly on RBI's intervention.
By 10:50am it was trading at its highest since January 31, at 86.6362 after opening at 87.3500.
This is in line with RBI Governor Sanjay Malhotra's remarks during the February 8 policy review.
He said, "Our interventions in the forex market focus on smoothening excessive and disruptive volatility rather than targeting any specific exchange rate level or band."