The Indian rupee staged a recovery on Monday, February 9, 2026, gaining 21 paise to trade at 90.44 against the US dollar in early sessions. This follows a period of localized pressure where corporate demand for the greenback and technical trading glitches had previously weighed on the currency. The primary catalyst for this rebound is the announcement of a landmark interim trade agreement between India and the United States. Under this new framework, Washington will slash tariffs on Indian goods from 50% to 18%, while India will reciprocate by reducing duties on US industrial and agricultural products. Market sentiment is also buoyed by the Reserve Bank of India’s robust external buffers. Latest data confirms India’s foreign exchange reserves have climbed to 723.8 billion dollars as of late January, providing over 11 months of import cover. This significant liquidity cushion allows the central bank to intervene effectively to curb excessive volatility. Domestic equity markets reflected this optimism with the BSE Sensex climbing 441.77 points to 84,022.17 and the NSE Nifty 50 rising 129 points to 25,822.70 during early trade. Foreign Institutional Investors (FIIs) have also turned net buyers, injecting over 1,950 crore rupees into the cash market in recent sessions. On the policy front, the RBI’s Monetary Policy Committee recently held the repo rate steady at 5.25%. While the central bank maintain’s a neutral stance, it has upgraded its GDP growth forecast for the current fiscal year to 7.4%. Headline inflation remains contained at approximately 2.1% for FY26, though a new CPI base year calculation is expected to introduce a minor upward bias in upcoming prints. Global cues remain a mixed bag as Brent crude prices eased slightly to 67.41 dollars per barrel. While the US dollar index has struggled to maintain levels above 100, geopolitical risks in the Middle East and shifting trade dynamics continue to necessitate a cautious outlook for currency traders in the medium term.