New Delhi

The rupee recovered 9 paise from its all-time closing low to settle at 88.71 against US dollar on Wednesday, as the Central Bank in its monetary policy decision announced a host of measures to support exporters and bring stability to the domestic unit.

Forex traders said the rupee advanced against the US dollar as the Reserve Bank of India (RBI) left the repo rate unchanged at 5.5 per cent and maintained a neutral stance in its fourth Monetary Policy of FY26.

Moreover, strength in domestic markets and a decline in crude oil prices and additional measures announced by the RBI governor to aid exporters further strengthened the domestic currency.

At the interbank foreign exchange, the rupee opened at 88.79 against the US dollar and touched an intraday high of 88.65 and finally settled for the day at 88.71, higher by 9 paise from its previous close.

On Tuesday, the rupee fell 5 paise to an all-time low of 88.80 against the US dollar.

"We expect the rupee to strengthen further as the monetary policy decision, along with a host of measures to support exporters may bring stability to the currency. Strength in the domestic markets and weak tone in the US dollar may further strengthen the rupee," Anuj Choudhary, Research Analyst Currency and Commodities Mirae Asset ShareKhan, said.

The RBI expectedly left its key interest rates unchanged on Wednesday, as it waited for greater clarity on the impact of US tariffs as well as playout of earlier rate cuts and recent tax reductions.

RBI Governor Sanjay Malhotra, however, signalled scope for easing in the coming months to support the economy from any possible hit from US tariffs.

"RBI also mentioned in the policy that they were closely watching forex rates, which meant that they were watching the depreciation in the currency carefully... The rupee is expected in the range of 88.50-89.00 on Friday after Thursday's holiday," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 97.75, lower by 0.02 per cent, amid US government shutdown.

"The US dollar fell amid US government shutdown and disappointing consumer sentiment data. US consumer sentiment unexpectedly fell to 94.2 vs forecast of 96," Choudhary said.

Brent crude, the global oil benchmark, was trading 0.74 per cent lower at USD 65.54 per barrel in futures trade.

"Falling global crude oil prices may also aid the domestic unit. However, FII outflows and the ongoing US visa fee hike issue may cap the upside," Choudhary said, adding that USDINR spot price is expected to trade in a range of 88.35 to 88.90.

On the domestic equity market front, Sensex jumped 715.69 points to settle at 80,983.31, while Nifty surged 225.20 points to 24,836.30.

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Foreign Institutional Investors offloaded equities worth Rs 1,605.20 crore on Wednesday, according to exchange data.