USD vs INR: Rupee logs biggest gain in 12 years; what triggered the sudden surge?

USD vs INR: The Indian rupee surged on Thursday, April 2, 2026. It rose 173 paise, or 1.8 per cent, to settle at 93.10 against the US dollar. It had closed at 94.83 in the previous session.

This marks the biggest one-day absolute gain in nearly 12 years.

The move comes after a phase of sustained weakness in the currency.

Add Zee Business as a Preferred Source

During the session, the rupee strengthened steadily. It touched an intraday high of 92.84. This reflects strong buying support and sharp reversal in trend.

The recovery in the rupee also supported domestic markets. Equity indices trimmed losses during the day. The currency move improved overall sentiment.

RBI action drives the move

The rally in the rupee was driven by steps taken by the Reserve Bank of India (RBI).

Recent policy actions changed market dynamics. These steps impacted positioning in both onshore and offshore markets.

Banks had built positions earlier. They were buying dollars in the spot market. At the same time, they were selling in offshore markets.

This created arbitrage opportunities. These trades were widely used.

However, RBI action disrupted this setup. Limits and restrictions were imposed. This forced banks to change their positions.

As a result, banks had to unwind trades. They started buying in offshore markets. They also sold dollars in the domestic market.

This reversal led to sharp rupee appreciation.

Technical move, not fundamentals

While speaking to Zee Business, Abhishek Goenka, Founder of IFA Global & Billionz, said the move is technical in nature.

He said the appreciation is driven by unwinding of positions. It is not due to strong fundamentals.

He explained that this is an RBI-induced move. Market structure changes led to the rally.

He added that such situations are rare. Similar conditions were seen in 2006–07 and during the Covid period.

He also pointed to differences in market levels. Spot markets show strength. But forward and offshore markets indicate a different trend.

This shows that the move is not broad-based.

Oil and flows keep pressure intact

Despite the sharp rise, pressure points remain. Oil prices are elevated. This continues to weigh on the rupee. Higher oil increases dollar demand. Foreign fund outflows are another concern. These flows impact currency stability.

These factors suggest that the underlying trend is still fragile.

Importer demand may cap gains

He said importer demand is likely to remain strong. Many importers missed lower levels earlier. They are expected to buy dollars on dips. This creates resistance for further rupee gains. Any sharp appreciation may see selling pressure.

Volatility to remain high

Market expert expect volatility to continue. The unwinding of positions is still ongoing. It may continue over the next few sessions. Large positions cannot be cleared in one day. This will keep markets active. There are also signs of stress in forward markets. Offshore premiums remain elevated. This indicates tight liquidity and continued adjustments.