Indian rupee jumps over 40 paise against US dollar: Can it rise further?

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.

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