RBI's March-end rupee support faces test from war and oil surge this year

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, ET BureauLast Updated: Mar 20, 2026, 05:31:00 AM IST

Synopsis

Historically, the rupee strengthens by March 31 due to RBI intervention, benefiting corporate balance sheets. However, this year, elevated oil prices and geopolitical tensions have led to significant RBI dollar sales, potentially challenging this trend. Traders anticipate a close around 91.75-92.50 per dollar, with a weaker outcome if interventions decrease amid sustained high oil prices.

Mumbai: Over the past decade, the rupee has typically closed stronger on March 31, relative to its weakest level during the previous quarter. Intervention by the Reserve Bank of India (RBI) tends to intensify in the final week of March, supporting a firmer end-of-year level. Such an outcome is considered favourable for corporate balance sheets, as companies usually convert foreign currency liabilities into rupees at the close of the financial year.

Going ahead, market participants will closely monitor the central bank's intervention strategy, as the current environment presents a notable hurdle for this trend. RBI is estimated to have already sold more than $15 billion in March to support the rupee amid geopolitical tensions in West Asia and elevated crude oil prices.

While many traders expect the rupee to close the month near the 91.75 per dollar level, some anticipate a weaker outcome, with the currency around 92.50 per dollar, particularly if the central bank scales back interventions should oil prices remain above $100 per barrel.

Agencies

Stronger intervention likely, local unit expected to close near 92 on March 31

"We typically see some extra intervention in the last days of the fiscal year. Many corporates state their foreign currency liabilities in rupee terms in their balance sheet, and a stronger rupee means a stronger balance sheet at year end. This time too, stronger intervention is expected, and I think the rupee would close around 92/$1 on March 31," said Sajal Gupta, head of forex and commodities at Nuvama.

The rupee touched a record low of 92.64/$ on Wednesday amid soaring oil prices and uncertainties in West Asia. Currency markets were closed on Thursday on occasion of Gudi Padwa.

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