Rupee strengthens to 94.86 as RBI intervention supports currency

The rupee opened at 94.95 at the interbank foreign exchange market before climbing to 94.86, building on Wednesday's 19-paise gain to 95.17. The currency's continued strength reflects structural forex interventions by the RBI alongside liquidity-tightening measures that have been sustaining appreciation momentum.

Market participants attributed the rupee's performance to central bank support coupled with traders unwinding leveraged long dollar positions. The currency has now decisively broken through the 95.50-95.00 trading range that had constrained movement in recent sessions.

Analysts see further upside potential if the rupee sustains a break below the 94.80 level, which could unlock an additional 50-75 paise of appreciation. Reduced direct dollar demand from oil companies is also expected to underpin the rupee's momentum in coming sessions.

However, external macroeconomic pressures including global growth concerns and geopolitical tensions are likely to temper the pace of further rupee gains, market watchers cautioned. The currency's trajectory will hinge on the balance between supportive RBI action and headwinds from international financial conditions.