The Indian rupee gained 3 paise to close at Rs 95.42 against the US dollar on Friday, recovering slightly after falling 12 paise in the previous session.

The currency remained in a narrow range during the day as dollar demand and geopolitical concerns continued to limit gains. At the interbank foreign exchange market, the rupee opened at Rs 95.39 and moved between Rs 95.38 and Rs 95.44 before ending at Rs 95.42 on a provisional basis. On Thursday, it had closed at Rs 95.45.

The rupee has remained under pressure this week as higher crude oil prices, foreign fund outflows and tensions in West Asia increased demand for the US dollar. India is particularly sensitive to oil prices because it imports around 90% of its crude requirements.

The Reserve Bank of India (RBI) has also played an important role in limiting the currency’s volatility. Market participants said state-run banks were likely selling dollars on behalf of the central bank, helping prevent the rupee from weakening beyond the Rs 95.50 level.

Despite Friday’s marginal recovery, the rupee ended the week around 0.2% weaker against the dollar. Persistent importer demand and higher oil prices continued to weigh on the currency, while RBI intervention helped keep the movement within a relatively narrow range.

India’s external position has provided some comfort. The country’s foreign exchange reserves rose by $14.1 billion to $707 billion for the week ended August 7, reaching a four-month high. The increase strengthens India’s ability to manage external pressures and support stability in the currency market.

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