The Indian rupee demonstrated resilience on Thursday, February 26, 2026, closing with marginal gains as it tracked a broader recovery in regional Asian currencies. While the local unit found support from a weakening dollar index and positive sentiment across emerging markets, its upward momentum was tempered by consistent dollar demand. Corporate activity and importers seeking to lock in rates at the daily reference point created a ceiling for the currency's appreciation. Despite these pressures, the rupee opened approximately 0.1% higher at 90.84 against the greenback, reflecting a period of relative stability following recent volatility. Macroeconomic Stability and Policy The Reserve Bank of India has played a pivotal role in anchoring the currency. In its February 2026 meeting, the Monetary Policy Committee maintained the repo rate at 5.25%, adopting a neutral stance that prioritizes data-driven decisions. Official projections for the 2026 fiscal year remain optimistic: * Real GDP growth is estimated at **7.4%** * Retail inflation is forecast to stay benign at **2.1%** * Forex reserves have reached a significant buffer of **$725.7 billion** This "goldilocks" environment—strong growth paired with controlled inflation—has provided the central bank with the necessary ammunition to intervene in the exchange market, preventing sharp, erratic swings in the rupee’s value. Institutional Inflows and Equity Trends Market sentiment has been bolstered by a significant shift in foreign capital. In February 2026, Foreign Institutional Investors (FIIs) turned net buyers for the first time in several months, injecting **$2.44 billion** into Indian equities. This marks the highest monthly inflow in 17 months, signaling a renewed appetite for the India story. On the domestic front, institutional support remains a structural pillar. Domestic Institutional Investors (DIIs) continue to absorb selling pressure, recently purchasing equities worth **₹5,119 crore** in a single session, supported by steady monthly SIP contributions of over **₹300 billion**. Market Performance and Outlook Domestic equity benchmarks showed a mixed but stable performance on Thursday. The Nifty 50 hovered near the **25,550** level, while the Sensex traded around **82,418**. Technology and banking shares led the intraday gains, mirroring a global rebound in tech stocks. However, the market remains in a state of cautious optimism. Traders are closely monitoring the **25,300** support level for the Nifty, with resistance anticipated near **25,800**. Immediate triggers for the rupee and broader markets include the upcoming Q4 GDP data release and evolving US bond yields. While global geopolitical tensions remain a background risk, India’s strengthening external buffers and robust manufacturing PMI continue to provide a solid foundation for the currency's near-term outlook.