Indian Rupee Hits Three-Week High Amid US-Iran Conflict

The Reserve Bank of India drove the Indian rupee to a three-week high against the US dollar on July 31, 2026, with the currency opening between 95.30 and 95.40. This appreciation followed aggressive market interventions by the central bank, which sold dollars to prevent sharp depreciation. The gains were further supported by a decline in the US dollar, triggered by weak US economic data showing a second-quarter GDP growth of only 1.5%.

These financial gains occurred against a backdrop of severe geopolitical instability. On July 30, 2026, the United States and Iran exchanged barrages of missile strikes. The conflict expanded as Jordan intercepted Iranian missiles and a strike in Kuwait resulted in one death.

Despite the volatility caused by these strikes and fluctuating oil prices, the rupee outperformed other oil-sensitive Asian currencies. It remains on track for its strongest weekly performance in four months, benefiting from a combination of domestic intervention and softening US economic indicators that offset the hawkish stance of the Federal Reserve System.