The Indian Rupee demonstrated significant strength during early trading on Thursday, February 12, 2026, gaining 38 paise to reach 90.40 against the US Dollar. The recovery is primarily attributed to a sharp reversal in foreign fund flows. After a challenging 2025 that saw a massive pull-out of 1.66 trillion rupees by foreign portfolio investors, February 2026 has marked a turning point. In just the first ten days of this month, foreign investors have pumped 11,641 crore rupees back into domestic equities. Currency stability has been further bolstered by suspected intervention from the Reserve Bank of India (RBI). State-run banks were reportedly active in offering dollars to defend the rupee from volatile swings, following its recent slide toward the 90.70 mark. Banking system liquidity remains a supportive pillar for the currency. Current figures indicate a surplus near 3 trillion rupees, a substantial improvement from the decade-low deficit of 3.1 trillion rupees recorded in early 2025. This abundant liquidity has helped align market rates and eased the transmission of recent monetary policy decisions. On the policy front, the RBI recently maintained the repo rate at 5.25% while revising the GDP growth forecast for the 2025–26 fiscal year upward to 7.4%. This optimistic domestic outlook is driven by resilient consumption and new trade agreements with the United States and the European Union, which have helped offset external pressures. However, the broader economic landscape faces persistent challenges from the energy sector. Brent crude prices surged toward 70 dollars per barrel this week, hitting a five-month high. Heightened geopolitical tensions in the Middle East and concerns over supply disruptions continue to act as a primary weight on the rupee's long-term appreciation. Market participants are currently monitoring a new inflation series that may reflect a slight climb in prices due to changing consumer basket weights. Despite these headwinds, the combination of aggressive RBI liquidity management and the return of foreign capital has provided a much-needed buffer for the national currency in the current trading session.