Rupee Extends Rally to Six-Week High, Fifth Straight Gain

The rupee rose for a fifth consecutive session on Monday, touching a six-week high against the dollar. The currency closed at 83.12 per dollar, its strongest since mid-February, according to Bloomberg data.

The rally extended a winning streak that has added roughly 1.2% over the past five trading days. Traders cited a softer dollar and the Reserve Bank of India's continued presence in the spot and forward markets as the main drivers.

The dollar index slipped 0.3% on Monday, giving emerging-market currencies room to recover. The rupee's move also followed a batch of dollar-selling by the RBI through sell-buy swaps, which absorb rupee liquidity without permanently draining reserves.

The central bank has been intervening regularly since late February, when the rupee tested record lows near 83.50. The swaps allow the RBI to defend the currency while managing liquidity conditions in the banking system.

For forex traders, the sustained rally raises the question of whether the RBI is shifting from a defense posture to a managed appreciation. The rupee's five-day winning streak is the longest since December, and the pace of gains has accelerated in the last two sessions.

The next catalyst is U.S. inflation data due later this week. A hot print could reverse the dollar's recent weakness, while a soft number would reinforce the rupee's upward momentum. The RBI's April policy meeting is also on the horizon, where the rate decision and stance will shape the currency's path.

For a broader view of currency markets, see our forex market analysis.