Indian Rupee Rises 1% in October for Best Monthly Performance Since February
Key Facts
The Indian rupee rose about 1% in October, marking its best monthly performance since February, as policy measures curbed demand for dollars and the central bank intervened in the market. A Reuters report published by Business Recorder said the currency performed better despite rising oil prices and portfolio outflows remaining sources of pressure. The improvement is notable because it followed February, when the rupee rebounded after progress in U.S.-India trade talks. But the report noted that the Middle East war renewed pressure on the currency after that rebound. This background shows October's gains came amid mixed pressures on dollar demand and capital flows.
Among the support measures, the Reserve Bank of India supplied oil companies with dollars in a move aimed at limiting their demand for the U.S. currency. Reuters reported that policy measures reduced dollar demand, alongside the bank's market interventions. The steps come as the country’s currency faces pressure linked to a rising oil bill, while higher crude prices remained a negative factor during the month. Portfolio outflows also continued, limiting the impact of the supportive measures. According to the report, the picture was not limited to central bank interventions; external pressures and investment outflows also converged.
Alongside the currency's improvement, data from India's Ministry of Statistics showed industrial production growth slowed to 6.7% year on year in September, from 8.0% in August. Manufacturing grew 7.6% year on year, while electricity and gas production rose 11.2% during the month. This put growth in the overall index below the previous month's level, despite continued expansion in the two industrial sectors cited. The index grew 6.8% year on year during the period from April to September 2026, according to the ministry's quick estimate. The data thus combined a monthly slowdown in the overall index with cumulative growth of 6.8% for the period.
September growth extended across most manufacturing groups, with 17 of 23 groups recording positive growth compared with the same month a year earlier. Electrical equipment posted the strongest growth among the three leading contributors, rising 33.9%. The manufacture of rubber and plastic products grew 19.9%, while the manufacture of motor vehicles, trailers and semi-trailers rose 19.0%. These groups supported manufacturing activity in September, which recorded overall year-on-year growth of 7.6%. The figures show that gains within manufacturing spanned multiple sectors, with clear differences in their growth rates.
Reuters said the rupee's advance in October was linked to reduced dollar demand through policy measures and market interventions, while higher oil prices and portfolio outflows kept pressure in place. This brings into focus the link between supplying oil companies with dollars and demand for the U.S. currency, as September data showed industrial growth slower than in August. In the background to the rupee's performance, February's rebound followed progress in U.S.-India trade talks, before the Middle East war renewed pressure on the currency. On the data, the ministry said September's estimate is provisional and will be revised in subsequent releases under the Industrial Production Index revision policy. The monthly growth reading therefore remains subject to revision in later releases.
The Ministry of Statistics is due to release industrial production data for October on 30 November 2026. The next release will be the first monthly reading of industrial activity after September's figures, which showed a slowdown in the overall index compared with August and varied growth across manufacturing groups. It will also follow a month in which the rupee rose about 1%, while oil prices and portfolio outflows remained sources of pressure, according to the Reuters report. September's figures will remain subject to revision under the index's policy, the ministry said in a notice about the provisional estimate. The next release date marks the next milestone for tracking India's industrial production data.