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Informist, Wednesday, Mar. 26, 2025

By Sourabh Kumar

MUMBAI – The rupee closed slightly higher against the dollar Wednesday, supported by banks that sold the greenback on behalf of overseas clients, likely for investment in Indian government bonds, dealers said. 

"Today, first oil companies bought heavily as they had some big payment due, and then there were good inflows, probably in gilts," a dealer with a foreign bank said. "But, there were outflows from equities as well."

After moving in a range of little over 20 paise, the Indian currency settled at 85.7050 a dollar against Tuesday's close of 85.7550 a dollar.

While the rupee started the day slightly higher against the greenback, it quickly came under pressure due to banks' dollar purchases for importers, dealers said. They said importers continued to demand dollars to meet their moth-end financial needs. Two hours into the trade, the rupee came under more pressure as oil companies also started to purchase the greenback, fearing a further rise in crude oil prices, dealers said. Some major oil marketing companies had their month-end payments due, for which they bought dollars. It also weighed on the rupee, dealers said. 

Crude oil prices rose Wednesday after data showed that inventories in the US fell by 4.6 million barrels last week, indicating robust demand for fuel in the US. As crude oil is a major commodity India imports, an increase in its prices raises the import bill of the country, thereby weighing on its currency. 

At 1530 IST, the May Brent Crude price on the Intercontinental Exchange was at $73.45 per barrel, up from $73.02 per barrel on Tuesday and $73.00 per barrel on Monday.

Moreover, both the domestic equity indices fell on Wednesday, with the Nifty 50 falling 0.8% and BSE Sensex dropping 0.9%. It ended up weighing on the Indian currency, dealers said. Due to such a pressure, the rupee fell to hit the day's low of 85.8925 a dollar.

However, some foreign fund inflows in domestic gilts market supported the rupee, dealers said. In addition, the dollar index remained largely steady after falling on Tuesday, which also supported the Indian unit, dealers said. The dollar index, which measures the strength in the greenback against a basket of six major currencies, was 104.23 against Tuesday's 104.21 and Monday's 104.31.

The dollar index remained weak due to a fall in US consumer confidence this month. Amid uncertainty around tariffs, The Conference Board said US consumer confidence fell to 92.9 in March, lower than expectations of 94.0 by analysts in a survey by Reuters poll.

As the rupee hit the day's low, some exporters took advantage and sold dollars, which also supported the rupee, dealers said. Exporters have been seeling dollars continuously for the past two weeks, cutting their long dollar positions, noting an overall rise in the rupee.

FORWARDS

Premiums on dollar/rupee forward contracts ended down as banks sold dollars for forward delivery on behalf of exporters at relatively higher levels, dealers said. A fall in the deficit in the banking system liquidity also pulled down the premiums, they said.

The net liquidity injected by the central bank--a proxy for liquidity conditions--declined to INR 1.57 trillion on Tuesday, down from Monday's INR 1.93 trillion.

However, a fall in the benchmark 10-year US Treasury yield limited the downside movement in forward premiums, dealers said. The 10-year US Treasury yield was down due to a decline in US consumer confidence.

At 1530 IST, the one-year dollar/rupee forward premium was at 2.20% on an annualised basis, against 2.22% on Tuesday. On an absolute basis, the premium was 189.50 paise against 190.00 paise on Tuesday. 

OUTLOOK

On Thursday, the rupee will take cues from movement in the dollar index and Chinese yuan, dealers said. Market participants await more clarity on US President Donald Trump's reciprocal tariffs, set to take effect from Apr. 2. 

Investors explored the possibility of a softer stance by US President Donald Trump after he said earlier this week that tariffs may not be imposed on all the countries. Foreign banks may continue to sell dollars for foreign fund inflow into domestic markets, which could keep the rupee supported, dealers said.

During the day, the rupee is seen moving in a range of 85.30-86.00 against the dollar. Dealers see technical support for the Indian unit at 85.90 a dollar.

India Rupee - World FX: Pound sterling dn as UK inflation dn more than view

MUMBAI – The pound sterling was down 0.4% against the greenback on Wednesday after UK's inflation rate fell more than expected in February. Data on Wednesday showed UK's inflation fell slightly to 2.8% last month, below analysts' forecast of 2.9% in a Reuters poll. Core inflation also fell to 3.5% in February from 3.7% in the prior month.

The Japanese yen was down 0.2% against the greenback. However, losses in the currency were limited after Bank of Japan governor Kazuo Ueda hinted that the Japanese central bank will conitnue to raise interest rates if the economic outlook is achieved but refrained from giving any direct indication toward when the central bank will hike rates. "If such moves lead to broad-based inflation across the economy, we must respond by raising interest rates," Ueda told Parliament on Wednesday. The euro was up 0.1% against the greenback. 

The dollar index remained broadly steady after declining on Tuesday. Data released on Tuesday showed US consumer confidence plunged to the lowest level in more than four years in March due to rising concerns over the impact of tariffs. The Conference Board's consumer confidence index fell 7.2 points to 92.9 this month, the lowest since January 2021. In a Reuters poll, economists had forecast a fall to 94.0. 

At 1523 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 104.23, compared to 104.21 on Tuesday and 104.31 on Monday. The index fell to a low of 103.94 on Tuesday. The Swiss franc was down 0.1%.

Investors await more cues on US President Donald Trump's second tranche of tariff implementation, which is set to take effect from Apr. 2. Trump will disclose the specific details of the tariffs he plans to implement next Wednesday.

The Canadian dollar was up 0.2% against the greenback on Wednesday after reports that Canada may not be severly impacted by the next round of tariffs, set to be effective from Apr. 2, and may face the lowest tier of tariffs in the second tranche. 

The Australian dollar and New Zealand dollar, both were up 0.4% each against the greenback. Data published on Wednesday showed the Australia's Consumer Price Index was flat on month but slowed to 2.4% on year in February from 2.5% on year in the month before. The inflation print came in line with analyst forecast in a Reuters poll. The trimmed mean measure, a gauge of core inflation rose 2.7% last month, from 2.8% a month earlier.  (Gowri Lakshmi)

India Rupee: Erases gains, falls as importers buy dollars for mo-end needs

MUMBAI – The rupee erased all gains from early trade and fell against the dollar as banks persistently purchased dollars on behalf of importers, who wanted to meet their month-end payment obligations, dealers said. The rupee was dragged to a low of 85.8925 a dollar during the day. 

The Indian currency also came under pressure as some banks purchased the greenback ahead of the daily reference-rate fixing window, as per dealers. Some foreign banks also bought dollars on behalf of foreign portfolio investors, who withdrew funds from the Indian stock market, dealers said. At 1209 IST, the benchmark indices, the Nifty 50 and the BSE Sensex, were down 0.3% and 0.4%, respectively. "There is mild sell-off (in equity market) from FPIs, there is importer buying and the fix-related buying, which put the rupee under pressure," a currency trader at a brokerage firm said. 

Some banks continued to sell dollars on behalf of exporters to meet their financial-year end payment requirements, which provided some cushion for the Indian currency, dealers said. According to dealers, if the rupee inches towards 86.00 a dollar, stop-losses are likely to be triggered on short dollar bets.

The dollar index remained broadly steady as investors await more cues on US President Donald Trump's second tranche of tariff implementation, which is set to take effect from Apr. 2. Trump will disclose the specific details of the tariffs he plans to implement next Wednesday. The index declined on Tuesday as consumer confidence in the world's largest economy plummeted to a four-year low in March. The Conference Board's consumer confidence index declined 7.2 points to 92.9 this month, the lowest level since January 2021. Economists in a Reuters poll had forecast a fall to 94.0. 

At 1216 IST, the dollar index, measures the strength of the dollar against a basket of six major currencies, was at 104.32 compared to 104.21 on Tuesday and 104.31 on Monday.

For the rest of the day, the rupee is seen moving in a range of 85.50-86.00 against the dollar. Dealers see immediate technical support for the Indian unit at 85.90 a dollar. (Gowri Lakshmi)

India Rupee: Technical Levels for rupee - Mar 26

MUMBAI – At 1051 IST, the rupee was at 85.7650 per dollar. At 0900 IST, the rupee was at 85.6900 a dollar, against the previous close of 85.7550. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi)

India Rupee - Asia FX: Mixed; mkt awaits clarity on upcoming Trump tariffs

MUMBAI - Asian currencies traded on a mixed note on Wednesday as markets participants await clarity on US President Donald Trump's trade policy ahead of a new round of tariffs next week. However, the Trump administration Monday said that it may not opt for aggressive tariff impositions on all countries as previously expected and that not all levies would come on the Apr. 2 deadline, which improved investors' risk appetite. 

The dollar index fell slightly on Tuesday as consumer confidence in the world's largest economy plummeted to a four-year low in March. The Conference Board's consumer confidence index plummeted 7.2 points to 92.9 this month, the lowest level since January 2021. Economists had forecast a fall to 94.0 in a Reuters poll. 

At 0930 IST, the dollar index that measures the strength of the dollar against a basket of six major currencies, was at 104.27 compared to 104.21 on Tuesday and 104.31 on Monday. The Malaysian ringgit was up 0.3% against the greenback tracking weakness in the dollar index. 

The Indonesian rupiah was up 0.2% against the greenback tracking gains in domestic equities. At 0930 IST, the benchmark index, the Jakarta Composite Index was up 3.5%. On Tuesday, the Indonesian currency slipped to its lowest level in two and a half decades, following which Bank Indonesia intervened in the foreign exchange market to defend the currency. "Global uncertainty is still related to the impact of Trump's tariff policy and geopolitical turmoil, including the impact of the trade war on China and many other emerging market countries in Asia," Bank Indonesia Director of Monetary and Securities Asset Management Fitra Jusdiman told Reuters. 

The Thai baht was down 0.4% against the US unit due to a fall in domestic equities. At 0930 IST, the benchmark Thailand SET index was down 0.6%. The Chinese yuan was down 0.1% against the US dollar. The People's Bank of China tweaked pricing of one-year policy loans, which may lead to reduction in funding costs for lenders, easing their pressure from increased market borrowing, reports said. China's central bank will allow qualified banks to pay different rates for the loans, which came into effect on Tuesday. 

The Philippines peso was down 0.2% against the greenback after Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. said on Tuesday that there was a "good chance" of a quarter-point interest rate cut in April. He also said that tamed inflation and a less volatile peso had reduced the need for the central bank to intervene in the spot foreign exchange market recently.

The South Korean won was down 0.1% after data on Wednesday showed that business sentiment remains pessimistic for next month amid rising global uncertainties. The busness survey index for the manufacturing sector stood at 92 for April, while for non-manufacturing sector it was 84.2. A reading below 100 indicated pessimists outnumbering optimists.

Further, South Korea's consumer confidence too weakened in March, with the composite consumer sentiment dropping to 93.4 from 95.2 in the previous month. However, losses in the South Korean won were limited after the government decided to shift its basic principle of budget management to active fiscal policy to boost its sluggish economy, the cabinet meeting on Tuesday declared.

The Taiwan dollar traded flat against the greenback after data on Tuesday showed that Taiwan's manufacturers reported a flat view on business prospects. A seprate data on Tuesday showed that retail sales in Taiwan fell by 3.8% on year in February, dropping from an upwardly revised 5.5% in January. The fall in retail sales last month marks the first decline in retail activity since October.  (Gowri Lakshmi)

India Rupee: Largely steady as importers' dollar buys offset FPI inflows

India Rupee: Largely steady as importers' dollar buys offset FPI inflows

MUMBAI – The rupee was broadly steady against the greenback on Wednesday as banks purchased the greenback on behalf of importers, which offset the positive impact of their dollar sales for foreign fund inflows into domestic equities, dealers said. "Flows have been coming but even yesterday (Tuesday) the inflows were being absorbed by the market and today also, there is significant buying (of dollars) pressure," a dealer at a state-owned bank said. 

The rupee opened slightly higher against the greenback at 85.6900 a dollar as some banks sold the greenback on behalf of foreign portfolio investors, looking to invest in the domestick stock market, dealers said. So far in March, FPIs have net infused $2.6 billion into domestic markets. The domestic currency also got some cushion as exporters sold their dollar holdings to meet their financial year-end payment requirements, dealers said. 

Noting the rise in the Indian unit, some oil marketing companies and other importers bought dollars to take advantage of the relatively lower dollar/rupee levels, dealers said. Some banks also purchased the greenback on behalf of importers, who wanted to meet their month-end payment obligations, dealers said.

The dollar index fell slightly on Tuesday after US consumer confidence plunged to its lowest level in more than four years in March due to rising concerns about the impact of tariffs, aiding the Indian unit. The US Conference Board's consumer confidence index fell 7.2 points to 92.9 this month, the lowest since January 2021. In a Reuters poll, economists had forecast a fall to 94.0. At 0940 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 104.27, compared to 104.21 on Tuesday and 104.31 on Monday. The index fell to a low of 103.94 on Tuesday. 

Market participants now await clarity on US President Donald Trump's trade policies ahead of a new round of tariffs next week. Trump will disclose the specific details of the tariffs he plans to implement next Wednesday.

During the day, the rupee is seen moving in a range of 85.50-85.80 against the dollar. Dealers see immediate technical support for the Indian unit at 85.80 a dollar. (Gowri Lakshmi)

India Rupee: Expected range for rupee - Mar 26

MUMBAI – Following are the expected support and resistance levels for the rupee on Wednesday, as forecast by leading banks and brokerages in an Informist poll:

(Pratiksha and Gowri Lakshmi)

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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