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Informist, Wednesday, Apr. 9, 2025

By Sourabh Kumar

MUMBAI – The rupee fell sharply to end the day at over a three-week low against the dollar, as banks persistently purchased greenback on behalf of importers, dealers said. A 25-basis-point rate cut by the Reserve Bank of India, along with the change in stance to accommodative from neutral, also weighed on the Indian currency, dealers said. 

After moving in a range of 24 paise against the dollar Wednesday, the rupee settled at over a three-week low of 86.6875 a dollar. On Tuesday, the rupee had closed at 86.2650 a dollar. Apart from importers' dollar demand, a fall in domestic stock indices also pushed the rupee lower against the greenback, dealers said. On Wednesday, the Nifty 50 and BSE Sensex closed 0.6% and 0.5% lower, respectively. 

The rupee, which opened a little over 20 paise lower on Wednesday, saw significant demand for dollars from importers. Some banks also purchased the greenback on behalf of overseas investors as they exited the domestic equities market, which weighed on the rupee, dealers said. However, the volumes were low ahead of the announcement of the Monetary Policy Committee outcome at 1000 IST.

Importers as well as foreign portfolio investors persistently purchased the greenback Wednesday as they were wary of a further fall in the rupee due to the ongoing uncertainty around global trade. Investors remained risk-averse on fears that brewing the global trade war, especially the ongoing tensions between the US and China, may pull down the global growth. This risk-aversion weighed on the Indian currency, dealers said. 

The rupee came under more pressure after the RBI changed its policy stance to accommodative from neutral, in addition to the rate cut. "The dollar/rupee went up during the policy announcement, but then it quickly came down," a dealer with a private bank said. During the policy announcement by RBI Governor Sanjay Malhotra, the rupee fell about 6 paise from the level before the start of the address. While a rate cut was largely expected by currency traders, some purchased dollars as they saw more rate cuts ahead due to the change in stance, and thus a further fall in the rupee. 

So far this month, the rupee has depreciated about 1.4% against the US dollar, with the fall this calendar year at 1.2%. On Wednesday, the Indian currency fell 0.5% against the greenback. While the Indian currency was the weakest against the dollar among Asian peers, the Thai baht strengthened the most on Wednesday.

The dollar index weakened on Wednesday, which limited losses in the Indian currency, dealers said. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was 102.20 at 1530 IST. The index was 102.91 on Tuesday and 103.47 on Monday. The dollar index came under pressure due to a strengthening euro and Japanese yen, which have the weightage in the index.

The euro, which carries a weightage of 57.6% in the dollar index, was up 0.8% in the European markets, while the yen, which has a weightage of 13.6% in the index, was up over 1.0% against the US dollar. The yen and the Swiss franc appreciated as these currencies attracted safe-haven investment amid the global trade uncertainty.

FORWARDS 

The premium on the one-year exact period forward contract ended steady as some banks purchased dollars at relatively lower levels, offsetting the fall in premium due to the 25-basis-point cut in repo rate and the change in stance to accommodative by the Reserve Bank of India, dealers said. 

The one-year forward premium fell to nearly a week's low of 2.26% soon after RBI Governor Sanjay Malhotra announced the rate cut and the change in stance to accommodative from neutral.

However, banks quickly came in to purchase forward dollars, which brought the one-year forward premium to the previous day's close of 2.29%. At 1530 IST, the premium on the one-year exact period forward contract ended at 198.94 paise, compared with 198.61 paise Tuesday and 204.06 paise Monday. On an annualised basis, the premium ended at 2.29%, unchanged from Tuesday but down from 2.38% Monday.

OUTLOOK 

The market is shut on Thursday on account of Mahavir Jayanti. On Friday, the rupee will take cues from the movement in the dollar index and the offshore Chinese yuan, dealers said.

Dealers expect the tariff war between the US and China to heat up after Beijing retaliated and raised tariffs on US goods to 84% from 34% earlier. This could drive investors to safe-haven assets, pulling down the rupee, dealers said. 

Dealers expect importers to continue purchasing dollars, which may put the rupee under pressure. However, they expect the RBI to step in with dollar sales if the Indian currency comes under immense pressure. In the post-policy press conference, Malhotra said while the central bank does not target a particular level, it intervenes only to manage excessive volatility in the rupee. 

"In so far as the currency management is concerned... we do not intervene in the currency management, it's only for excessive or disruptive volatility that we do so, we do not try to manage or target any band or level of the Indian rupee," Malhotra said at the post-policy press conference.

Market participants would keenly await the release of the minutes of the US Federal Reserve's latest policy meeting. During the day, the rupee is seen moving in a range of 86.20-86.90 against the dollar. Dealers see technical support for the Indian unit at 86.80 a dollar. 

India Rupee - World FX: Australian dollar up as US hints at talks with China

MUMBAI – The Australian dollar was sharply up against the US dollar after the White House indicated US President Donald Trump was open to negotiations with China if these were initiated by Beijing. The US has cumulatively imposed a sweeping 104% duty on all imports from China, which came into effect earlier in the day. Any change in the Chinese economy directly impacts the Australian currency due to their close bilateral trade relations. China buys a lot of metals and minerals from Australia. In February, major commodities exported by Australia to China were iron ores, petroleum gas, and coal briquettes.

Tracking gains in the Australian unit, the New Zealand dollar also rose and was up 0.4% against the greenback. However, gains in the currency were limited after the Reserve Bank of New Zealand Wednesday lowered its official cash rate by 25 basis points to 3.5%. 

The euro traded 0.5% higher against the greenback after reports said that Germany's Conservative party had reached a deal with the centre-left Social Democrats to form the government under chancellor-in-waiting Friedrich Merz. The euro also gained as the dollar index continued to fall as the greenback continued to lose its sheen as a safe-haven currency.

The US dollar remained down against major global currencies as investors weighed the impact of the aggressive reciprocal tariffs which came into effect Wednesday. At 1337 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 102.47, down from 102.91 on Tuesday and 103.47 on Monday. Market participants now await the latest Federal Open Market Committee meeting's minutes due later in the day. 

The pound sterling and the Swiss franc traded slightly up. The Japanese yen rose 0.5% against the greenback after Bank of Japan Governor Kazuo Ueda said the central bank will continue to raise interest rates. "The economy and prices are moving roughly in line with our forecasts made in our quarterly report. But we need to pay due attention to risks, especially recent heightening uncertainty over developments in each country's trade policy," Ueda said in a speech Wednesday.  (Gowri Lakshmi)

India Rupee: Technical Levels for rupee - Apr 9

MUMBAI – At 1125 IST, the rupee was at 86.5475 per dollar. At 0900 IST, the rupee was at 86.4700 a dollar, against the previous close of 86.2650. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Sourabh Kumar and Gowri Lakshmi)

India Rupee:Sharply dn on importers' dlr buys; RBI cuts rate, changes stance

MUMBAI – The rupee remained sharply down against the dollar as banks continued to purchase the greenback on behalf of importers and overseas investors amid uncertainty around global trade, dealers said. The Indian currency fell slightly more after the Reserve Bank of India's Monetary Policy Committee cut the repo rate by 25 basis points and changed its stance to 'accommodative'. 

During the RBI governor's policy speech, the rupee fell to a three-week low of 86.6650 a dollar. It was trading near 86.58 a dollar immediately before the speech started. 

"People were taking long dollar positions since morning due to global trade uncertainty and based on the view that policy would be more dovish," a dealer at a state-owned bank said. "However, some people sold (dollars) after the rate decision, which pulled the (dollar/rupee) levels down from the day's high."

The Reserve Bank of India's rate-setting panel, in its first policy meeting of the current financial year, reduced the policy repo rate by 25 basis points, in line with market expectations. The MPC unanimously voted to reduce the policy repo rate to 6.00%, RBI Governor Sanjay Malhotra said. It also decided to change its stance to 'accommodative' from 'neutral'.

A fall in crude oil prices, however, supported the Indian unit, dealers said. At 1047 IST, the June Brent crude contract on the intercontinental exchange was at $60.21 per barrel, down from $62.82 per barrel on Tuesday and $64.82 per barrel on Monday. A fall in crude oil prices will weigh less on India's import bill. 

A decline in the dollar index also supported the Indian currency, a dealer said. The index, which measures the strength of the greenback against a basket of six major currencies, was at 102.51 at 1105 IST against 102.91 on Tuesday and 103.47 on Monday. The index remained weak, primarily due to a strong euro, as the euro carries a weightage of 57.6% in the index. The euro was higher after Germany's conservatives under Friedrich Merz, who recently won the national election, reached a deal with the centre-Left Social Democrats to form government, media reports said.

For the rest of the day, the rupee is seen moving in a range of 86.40-86.80 against the dollar. Dealers pegged immediate technical support for the Indian unit at 86.70 a dollar.  (Gowri Lakshmi)

India Rupee: Slumps as risk appetite hit due to US tariffs; MPC outcome eyed

MUMBAI – The rupee slumped against the dollar Wednesday on low-risk appetite and as banks rushed to purchase dollars on behalf of importers, who were wary of a further fall in the Indian unit, dealers said. Some banks also bought dollars on behalf of foreign portfolio investors, which further weighed on the rupee, dealers said.

"It's a buy on dips market today. Importers will come at every level. The rest of the movement and clarity will come once MPC is over," a dealer at a private bank said. 

Market participants were keenly waiting for the Reserve Bank of India's Monetary Policy Committee's decision on the repo rate, due at 1000 IST. An Informist poll of 15 economists expects the rate-setting panel to lower the repo rate by 25 basis points to 6.00%.

Apart from importers, banks also purchased dollars on behalf of overseas investors, who continued to exit the Indian financial markets as their risk appetite took a hit due to the ongoing tariff war and worries over recession in the US. At 0926 IST, the benchmark indices, the Nifty 50 and the BSE Sensex, were down 0.6% and 0.5% respectively. So far in April, overseas investors have withdrawn $1.9 billion worth of shares from the domestic stock market. 

Dealers said the risk-off sentiment amongst investors was evident across all emerging markets as they shifted their funds to other safe-haven assets. A fall in other Asian currencies also put the rupee under pressure. Other Asian currencies fell between 0.2-0.4%. The Chinese yuan fell below the important level of 7.40 a dollar, before recovering slightly. 

The dollar index remained weak, primarily due to a strong euro, as the euro carries a weightage of 57.6% in the index. The euro was higher by 0.7% against the US dollar after Germany's conservatives under Friedrich Merz, who recently won the national election, reached a deal with the centre-Left Social Democrats to form government, media reports said. At 0919 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 102.40, down from 102.91 Tuesday and 103.47 Monday. 

During the day, the rupee is seen moving in a range of 86.00-86.75 a dollar. Dealers see immediate technical support for the Indian unit at 86.70 a dollar. (Gowri Lakshmi)

India Rupee: Slumps as risk appetite hit due to US tariffs; MPC outcome eyed

MUMBAI – The rupee slumped against the dollar Wednesday on low-risk appetite and as banks rushed to purchase dollars on behalf of importers, who were wary of a further fall in the Indian unit, dealers said. Some banks also bought dollars on behalf of foreign portfolio investors, which further weighed on the rupee, dealers said.

"Its a buy on dips market today. Importers will come at every level. The rest of the movement and clarity will come once MPC is over," a dealer at a private bank said. 

Market participants were keenly waiting for the Reserve Bank of India's Monetary Policy Committee's decision on repo rate, due at 1000 IST. An Informist poll of 15 economists expects the rate-setting panel to lower the repo rate by 25 basis points to 6.00%.

Apart from importers, banks also purchased dollars on behalf of overseas investors, who continued to exit the Indian financial markets as their risk-appetite took a hit due to the ongoing tariff war and worries over recession in the US. At 0926 IST, the benchmark indices, the Nifty 50 and the BSE Sensex, were down 0.6% and 0.5% respectively. So far in April, overseas investors have withdrawn $1.9 billion worth of shares from the domestic stock market. 

Dealers said the risk-off sentiment amongst investors was evident across all emerging markets as they shifted their funds to other safe-haven assets. A fall in other Asian currencies also put the rupee under pressure. Other Asian currencies fell between 0.2-0.4%. The Chinese yuan fell below the important level of 7.40 a dollar, before recovering slightly. 

The dollar index remained weak, primarily due to a strong euro, as the euro carries a weightage of 57.6% in the index. The euro was higher by 0.7% against the US dollar after Germany's conservatives under Friedrich Merz, who recently won the national election, reached a deal with the centre-Left Social Democrats to form government, media reports said. At 0919 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 102.40, down from 102.91 Tuesday and 103.47 Monday. 

During the day, the rupee is seen moving in a range of 86.00-86.75 a dollar. Dealers see immediate technical support for the Indian unit at 86.70 a dollar. (Gowri Lakshmi)

India Rupee - Asia FX:Most down as investors brace for US tariffs to come in

MUMBAI – Most Asian currencies declined against the dollar Wednesday on a risk-off sentiment as investors remained wary of ongoing uncertainties around tariffs, especially as the latest reciprocal tariffs announced by the US come into effect soon. The Chinese yuan fell below the important level of 7.40 a dollar, before recovering slightly. The US had imposed a cummulative 104% import duty on China, which comes into effect Wednesday.

On Tuesday, China unveiled new measures as part of its economic stimulus plan to mitigate the impact of the recent stock market rout. The People's Bank of China said early Tuesday that it will provide support to a sovereign fund as and when needed to support its decision to buy more stock. 

The Malaysian ringgit was down 0.2% against the US dollar. Reports showed that Malayasia's cenral bank is looking beyond the monetary policy measures to manage the impact of tariffs from the US as the reciprocal tariffs come into effect Wednesday. Strong investments, resilient domestic demand and diversified trading partners will help support the economoy, Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said. 

The South Korean won was down 0.1% as investors excercised caution on investing in riskier assets. On Wednesday, South Korea introduced a package of emergency funding worth $2 billion for its autombobile industry to mitigate the harsher-than-expected tariff blow from Washington. 

The Indonesian rupiah was down 0.4% against the greenback. Indonesia announced a series of concessions on US goods Tuesday, including a reduction of import duties on electronic goods and steel, ahead of negotiations with Washington. The Philippines's peso was down 0.3% against the greenback after data released Tuesday showed a fall in the country's manufacturing production. Factory output dropped 1.6% on year in February, from a downwardly revised 3.0% from a month prior. 

The Taiwan dollar was down 0.1% against the US dollar. The dollar index remained weak, primarily due to a strong euro, as the latter carries a weightage of 57.6% in the index. The euro was sharply higher against the US dollar after Germany's conservatives under Friedrich Merz, who recently won the national election, reached a deal with the centre-Left Social Democrats to form government, media reports said. 

At 0906 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies was at 102.35, down from 102.91 Tuesday and 103.47 Monday.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Apr 9

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: 

(Sourabh Kumar)

End

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

Edited by Saji George Titus

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