A historic jump was seen in the rupee on Tuesday after the announcement of trade deal with America and reduction in tariffs. The special thing is that such strong growth has been seen only 10 times in the last 12 years. If we look at the data, there has been an increase of 1.5 percent in the rupee against the dollar during the trading session. The special thing is that after the year 2014, this is the third biggest rise in rupee in any single day. After which the rupee has become stronger against the dollar reaching the level of 90. If experts are to be believed, such a rise in the rupee can be seen continuously in the coming decades. Let us tell you that in the last weeks of the month of January, the rupee had crossed the level of Rs 92. After that, due to the budget and now the reduction in tariff and trade with America, the rupee appreciated tremendously. However, last year in 2025, the rupee has seen a rise of more than 5 percent against the dollar.
Historic rise in rupee
Following the trade agreement between India and the US, the Indian rupee on Tuesday gained 122 paise or 1.33 per cent to close at 90.27 (provisional) against the US dollar and emerged as the best performing currency among the Asian currencies. Forex traders said that due to the trade agreement between India and the US, the Indian rupee reached its highest level in two and a half weeks and gained about 1.5 per cent. Domestic indices also gained about 2.75 per cent, which strengthened the sentiments in the domestic market. Apart from this, weakness in crude oil prices and expected foreign investment also boosted the morale of investors.
India and the US have agreed to a trade deal under which Washington will reduce reciprocal tariffs on Indian goods to 18 percent, which is lower than the tariffs applicable to countries like China, Bangladesh and Vietnam. At the interbank foreign exchange market, the rupee opened at 90.30 against the US dollar, then recovered slightly and touched a high of 90.05 and a low of 90.52 during the day. At the end of the trading session on Tuesday, the rupee was at 90.27 (provisional) against the US dollar, registering an increase of 122 paise from its previous close. A day after the presentation of the Union Budget 2026-27, the rupee on Monday closed 44 paise higher at 91.49 against the US dollar.
Such a rise only 10 times in 12 years
According to Bloomberg data, historically the biggest intraday rise in the rupee was recorded on December 18, 2018, when it gained 1.62 per cent, followed by a rise of 1.51 per cent on November 11, 2022. The 1.48 percent rally that occurred on February 3, 2026 has now joined the list, leaving behind several other notable events including November 2, 2018 (1.40 percent) and May 20, 2019 (1.29 percent). Other large one-day swings were primarily concentrated during peak periods of global volatility, such as March 2020, when pandemic-induced market turmoil led to sharp fluctuations in currencies.
CAD will reduce due to reduction in tariff
Forex traders say that the India-US trade agreement will open the doors for participation of foreign investors (FIIs) and if capital inflows improve in the current year 2026, then some pressure on the rupee will reduce. Goldman Sachs said in a research note that following the reduction of ‘reciprocal tariffs’ on India’s exports to the US, we estimate that the current account deficit will decline from about 0.25 per cent of GDP to 0.8 per cent. Additionally, if the current account deficit widens upon the conclusion of the India-US trade deal, this would ease some pressure on the Rupee and bring downside risks to our current USD/INR 12-month forecast (94). However, some experts believe that the situation will not be completely favorable for the rupee.
There may be obstacles in the deal
The note said that there may be some obstacles to this trade deal – for example, it may not be easy for India to immediately divert oil purchases from Russia. RBI’s foreign exchange policy can also complicate the situation. HSBC said in a research note that the RBI has been intervening in an unprecedented manner over the past few months to prevent unilateral speculative positions in the Indian rupee – whether short-term or long-term. The note further said that our end-2026 forecast for USD-INR is 90.
Rupee will depend on these things
Anindya Banerjee, head of currency and commodity research, Kotak Securities, said the recent trade agreement and the 18 per cent reduction in tariffs are likely to boost modest growth, but its pace and extent will depend on the extent of RBI intervention, as maintaining export competitiveness is a priority. There may be a slight improvement in foreign investment, although a sharp change is unlikely as global investors focus on topics such as AI, quantum, memory and data centres. Currency experts believe that the local currency is expected to remain in the range of 89-91 against the US dollar.