The rupee rebounded sharply on Monday, rising 46 paise to settle at 89.20 (provisional) against the US dollar, supported by likely intervention from the Reserve Bank of India.

The currency opened strong at 89.46 at the interbank forex market and traded between 89.05 and 89.50 before closing at 89.20. On Friday, the rupee had tumbled 98 paise to a record low of 89.66 amid heavy demand for the greenback, broad-based equity selloffs and trade-related uncertainty — its steepest single-day fall in over three years.

Traders said the central bank has likely intervened in the non-deliverable forward market before spot trading began on Monday and stepped in intermittently to stabilise the currency. According to a Reuters report, foreign exchange advisory firm IFA Global said the central bank may have been conserving reserves to intervene at higher levels of the exchange rate.

Despite intervention, the rupee remains down over 4 per cent in 2025, pressured by weak trade and portfolio flows as US-India trade talks remain unresolved. RBI governor Sanjay Malhotra, however, said in the interview with Zee Business, the recent decline in the rupee has been natural, and though the RBI intervenes to manage excess volatility in the currency, a 3-3.5 per cent annual depreciation in the rupee is in line with the historical average.