Rupee posts best week in seven months amid policy support

The Indian rupee recorded its best performance in seven months this week, appreciating 2% as policy measures helped ease short-term depreciation pressures. The gain marks a significant upturn for the currency after sustained weakness in recent months.

However, analysts cautioned that the improvement may prove temporary without broader economic strengthening. They emphasised that sustained rupee recovery depends on meaningful improvements across the overall economic landscape, including addressing structural imbalances.

Concerns persist over India's merchandise trade deficit, which widened to $30.21 billion in September. This elevated deficit has unsettled investors, particularly regarding the potential impact of frequent foreign exchange regulation changes on market confidence and stability.