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Mumbai: The rupee gained 42 paise to close at 91.51 (provisional) against the US dollar on Monday, February 2, a day after the Union Budget 2026-27 was presented, largely as crude oil prices retreated from their elevated levels.

Forex traders said the Reserve Bank of India (RBI) seemed to be defending the 92 per dollar level with a lot of resolve.

At the interbank foreign exchange market, the rupee opened at 91.95 against the US dollar, then gained some ground to touch an intraday high of 91.45 and a low of 91.95 against the greenback.

At the end of the trading session on Monday, the rupee was quoted at 91.51 (provisional) against the greenback, registering a gain of 42 paise from its previous close.

On Friday, the rupee hit a record low of 92.02 before ending 6 paise higher at 91.93 against the US dollar.

For the rupee, the Budget offered reassurance, not relief, and the government’s high borrowing plan is likely to weigh on investor sentiments going ahead.

The government is likely to borrow Rs 17.2 lakh crore in the next financial year to fund its fiscal deficit projected at 4.3 per cent of the GDP.

“Overall, it looks like a prudent budget, focusing on continuity. Given the geopolitical uncertainties and challenges, it seems the government it seems has chosen to go a bit slow on fiscal consolidation,” IFA Global said in a research note.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09 per cent higher at 97.07.

Brent crude, the global oil benchmark, was trading 4.46 per cent lower at USD 66.23 per barrel in futures trade, as the US and Iran were talking about avoiding US strikes on Iranian soil.

The oil prices had touched USD 72 per barrel after traders expected a US strike on Iran during the weekend.

“As the Budget volatility subsides, the Indian rupee and domestic equities have emerged as regional outperformers. A combination of cooling commodity prices, enhanced fiscal control, large forex reserves and suspected corporate dollar selling has provided a tailwind for the local currency,” Dilip Parmar, Research Analyst, HDFC Securities, said.

In the near term, the USD-INR spot is likely to consolidate within a tight range, finding support at 91.10 and facing resistance near 91.85, Parmar added.

On the domestic equity market front, Sensex jumped 943.52 points to settle at 81,666.46, while the Nifty surged 262.95 points to 25,088.40.

On Sunday, equity markets reacted negatively to the FY27 Budget as it proposed a higher securities transaction tax on derivatives and changes to buyback taxation, raising concerns over increased costs for investors.

Foreign Institutional Investors offloaded equities worth Rs 588.34 crore on Sunday, according to exchange data.