India Rupee Review
Sharply down as oil companies continuously buy dollars
This story was originally published at 16:53 IST on 21 August 2025
Register to read our real-time news.Informist, Thursday, Aug. 21, 2025
By Pratiksha
MUMBAI – The rupee erased all of its earlier gains and ended sharply lower against the dollar Thursday as state-owned banks continuously bought the greenback on behalf of oil marketing companies during the last leg of the trade, dealers said.
"Stop losses (on short dollar bets) were hit after 87.15 (a dollar). The market was running short (on dollar) which is why the sharp movement happened," a dealer at a state-owned bank said. "Oil companies were bidding (buying dollars) heavily."
After hitting a high of 86.9200 a dollar during the day, the rupee ended at 87.2700 on Thursday, 0.2% lower from its previous close. The Indian currency traded in a range of 34 paise during the day. Other Asian currencies also fell between 0.1% and 0.7% against the dollar, with the Taiwan dollar being the worst hit.
The rupee had started the day on a positive note, rising past the key 87-per-dollar mark shortly after opening as banks sold the greenback on behalf of traders, who wanted to trim their long dollar positions, noting the Indian unit's recent rise, dealers said.
"Most of the long (dollar) cutting has happened in the last few days, but we are still seeing some of it happening. Mostly in offshore," a dealer at a private sector bank said.
Further, some foreign banks sold dollars, likely for foreign portfolio inflows into Indian equities, which also supported the Indian unit, dealers said. Some of these inflows were likely on account of overseas investment into the initial public offerings of domestic companies, they said.
The initial public offerings of Vikram Solar Ltd., Shreeji Shipping Global Ltd., Gem Aromatics Ltd., and Patel Retail Ltd. opened for subscription Tuesday and will close Thursday. The public offer of Mangal Electrical Industries Ltd. opened for subscription Wednesday and will close Friday.
However, some banks stepped in to buy the greenback on behalf of oil marketing companies and other importers, in order to take advantage of the relatively lower dollar/rupee levels, which weighed on the Indian unit, dealers said. Dollar purchases by importers for most part of the day were not aggressive in nature, they said.
The rupee moved in a tight range of 86.95-87.05 for most of the day, as traders avoided large bets owing to uncertainty on the near-term trajectory of the Indian unit. This also contributed to volumes being lacklustre in the first half of the day.
However, oil marketing companies stepped up their dollar purchases in the last two hours of the trade, leading to stop losses being triggered on short dollar bets at around 87.10 and 87.20, dealers said. Following this, the Indian unit fell to the day's low of 87.2700 a dollar.
"The oil importers who were not buying (dollars) all these days suddenly came in today, which is why the sharp move happened," a dealer at a foreign bank said. "This kind of reversal was very much possible after the kind of levels we were seeing earlier."
Some dealers said banks likely bought the greenback for foreign fund outflows from corporates, which also exerted downward pressure on the rupee.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.2700 | 87.0300 | 86.9200 | 87.2700 | 87.0650 |
| 1-year dlr/rupee fwd (paise) | 188.11 | 187.61 | 188.31 | 187.11 | 188.30 |
FORWARDS
The one-year dollar/rupee forward premium ended largely steady Thursday as traders exercised caution ahead of the US Federal Reserve's Jackson Hole symposium, to be held Thursday-Saturday, dealers said. The event holds importance as Fed Chair Jerome Powell is expected to speak Friday on the economic outlook and the central bank's policy framework.
Market participants will closely assess Powell's comments to get more cues on the US rate trajectory. "Forwards has no cues right now. It is at the mercy of what Powell says," the dealer at a foreign bank said. "If the comments are dovish, we may see more paying happening."
Forwards of a currency pair are reflective of the interest rate differential between two countries. Fed funds futures traders are now pricing in an 81.1% probability of a 25-basis-point rate cut at the Fed's September meeting, according to the CME Group's FedWatch Tool.
However, some banks sold dollars for forward delivery, noting the relatively higher levels, which weighed on the premiums, dealers said. The one-year forward premium has risen almost 18 bps so far this month. Some banks also bought the greenback for forward delivery on behalf of importers, noting the appreciation in the rupee in the spot market, which supported the premiums, according to dealers.
Meanwhile, minutes of the Reserve Bank of India's Monetary Policy Committee's August meeting released Wednesday did not lend fresh cues to the interest rate trajectory in 2025. Minutes showed uncertainty about the impact of US tariffs on Indian goods exports and the unfolding growth-inflation dynamics led to the rate-setting panel's decision to keep the repo rate and the stance unchanged at its meeting in August.
At 1530 IST, the one-year exact period dollar/rupee premium was 2.16%, against its previous close of 2.15%. On an absolute basis, the premium was 188.11 paise, against 188.30 paise Wednesday. Dealers see the one-year forward premium in the range of 2.05-2.20% in the near term.
OUTLOOK
On Friday, the rupee may open largely steady as traders exercise caution ahead of Powell's speech at Jackson Hole Symposium, dealers said. "It all depends on what Powell says. He is in a peculiar position, where he can't put Fed's independence at stake. So, I think he will not indicate for cuts," said a dealer at another private-sector bank. "In the past, the Jackson Hole event has led to sharp policy moves, so it is important to look at what he says."
If Powell's comments hint at a rate cut in September, dealers expect the rupee to appreciate sustainably above 87 a dollar. However, if his tone is hawkish, the Indian unit may inch closer to 87.50-88.00 a dollar.
The local currency will also take cues from the movement of the dollar index after the weekly US unemployment report at 1800 IST and the flash services and manufacturing Purchasing Managers' Index for August at 1915 IST.
Some dealers expect the rupee to be supported by foreign portfolio inflows due to improvement in investors risk appetite. However, they are unsure if markets would continue to attract substantial foreign inflows in the near term due to the ongoing uncertainty about US tariffs.
Dealers expect banks to continue buying dollars on behalf of importers around the current levels on the expectation that the local unit may depreciate further going ahead.
During the day, the rupee is seen moving in a range of 87.00-87.40 against the dollar. Dealers peg key technical support for the Indian unit at 87.30 a dollar.
India Rupee - World FX: Japanese yen falls as exports decline most in 4 yrs
| AT 1520 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3479 | 1.3483 | 1.3435 | 1.3450 |
| EUR/USD | 1.1657 | 1.1663 | 1.1625 | 1.1652 |
| NZD/USD | 0.5828 | 0.5833 | 0.5814 | 0.5817 |
| AUD/USD | 0.6426 | 0.6437 | 0.6415 | 0.6431 |
| USD/JPY | 147.6570 | 147.6970 | 147.2610 | 147.3160 |
| USD/CAD | 1.3877 | 1.3885 | 1.3870 | 1.3867 |
| EUR/JPY | 172.1200 | 172.2200 | 171.5280 | 171.5730 |
| CHF/USD | 1.2418 | 1.2443 | 1.2399 | 1.2426 |
| EUR/CHF | 0.9385 | 0.9392 | 0.9367 | 0.9359 |
MUMBAI - The Japanese yen fell nearly 0.2% against the greenback after data released Wednesday showed the country's exports dropped 2.6% on year in July, posting its steepest drop in four years. The sharp decline in exports showed that the impact of US tariffs has intensified and raised concerns about the outlook for the export-reliant economy. The fall in exports was sharper than the 2.1% contraction forecast in a Reuters poll and compared with a 0.5?cline in June. Imports declined 7.5%, less than the 10.4?ll that was expected.
Further, data released Thursday showed Japan's manufacturing activity contracted for the second month in August as US tariffs weighed on overseas demand. The S&P Global flash Japan Manufacturing Purchasing Managers' Index rose to 49.9 in August from July's final 48.9, but remained below the 50.0 threshold that separates expansion from contraction, for two straight months.
The New Zealand dollar fell 0.1?ter Reserve Bank of New Zealand Governor Christian Hawkesby said on Thursday the impact of interest rate cuts on the local economy had been slower than expected, with uncertainties swirling over tariffs hitting business and consumer confidence. The New Zealand central bank Wednesday cut its policy rate by 25 basis points to a three-year low of 3.00% and flagged further reductions in coming months.
The pound sterling and euro traded flat Thursday as market participants now await Federal Reserve's Jackson Hole Economic Policy Symposium this week, where Fed Chair Jerome Powell is due to speak on Friday. Powell's speech on the economic outlook and the central bank's policy framework will be watched out for more cues on the Fed rate trajectory.
Data released Thursday showed French business activity almost grew for the first time in a year in August, outperforming expectations. The HCOB France flash purchasing managers index for the country's dominant services sector, compiled by S&P Global, came in at 49.7 in August, its highest since the same month last year and close to the 50-point threshold separating growth from contraction.
The dollar index rose marginally Thursday even though market participants are still largely pricing in a rate cut of 25 bps at the US Federal Open Market Committee's September meeting. However, Fed fund futures now show an 18% chance of status quo on rates by the US FOMC in September, from nil a week ago, according to the CME's FedWatch tool.
At 1541 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.25, against 98.21 Wednesday and 98.28 Tuesday. (Rati Chaphekar)
India Rupee: Fwd premium steady on caution ahead of Jackson Hole Symposium
| AT 1314 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.0200 | 87.0300 | 86.9275 | 87.0425 | 87.0650 |
| 1-year dlr/rupee fwd (paise) | 187.61 | 187.61 | 188.02 | 187.11 | 188.30 |
India Rupee: Fwd premium steady on caution ahead of Jackson Hole Symposium
MUMBAI – The one-year dollar/rupee forward premium was largely steady Thursday as traders exercised caution ahead of the Federal Reserve's Jackson Hole symposium, to be held Thursday-Saturday, dealers said. The event holds importance as Fed Chair Jerome Powell is expected to speak Friday on the economic outlook and the central bank's policy framework.
Market participants will closely assess Powell's comments to get more cues on the US rate trajectory. "Forwards are not moving much. There is no trigger as such. If Powell is dovish at the Jackson Hole event, I expect (1-year) forward premium to rise to 2.20%," a dealer at a private sector bank said.
Forwards of a currency pair are reflective of the interest rate differential between two countries. Fed funds futures traders are now pricing in an 81.1% probability of a 25-basis-point rate cut at the Fed's September meeting, according to the CME Group's FedWatch Tool.
However, some banks sold dollars for forward delivery, noting the relatively higher levels, which weighed on the premiums, dealers said. The one-year forward premium has risen almost 18 bps so far this month.
Some banks also bought the greenback for forward delivery on behalf of importers, noting the appreciation in the rupee in the spot market, which supported the premiums, according to dealers. The rupee rose to a high of 86.9275 a dollar earlier in the day.
Meanwhile, minutes of the Reserve Bank of India's Monetary Policy Committee's August meeting released Wednesday did not lend fresh cues to the interest rate trajectory in 2025. Minutes showed uncertainty around the impact of US tariffs on Indian goods exports and the unfolding growth-inflation dynamics led to the rate-setting panel's decision to keep the repo rate and the stance unchanged at its meeting in August.
At 1314 IST, the one-year exact period dollar/rupee premium was 2.16%, against its previous close of 2.15%. On an absolute basis, the premium was 187.61 paise, against 188.30 paise Wednesday. Dealers see the one-year forward premium in the range of 2.05-2.20% in the near term. (Pratiksha)
India Rupee: Remains higher on FX inflows; importers' dollar buys cap gains
| AT 1210 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 86.9725 | 87.0300 | 86.9275 | 87.0425 | 87.0650 |
MUMBAI – The rupee remained higher against the dollar as banks sold the greenback, likely for foreign portfolio inflows into Indian equities, dealers said. Some of these inflows were likely on account of overseas investment into the initial public offerings of domestic companies, they said.
"There are some inflows likely for the IPOs that are there. But these IPOs are not too big, so the selling (of dollars) is not that much," a dealer at private sector bank said. "Equities are also in the green. which is supporting (the rupee)." At 1210 IST, the Nifty 50 and the Sensex were up 0.2% and 0.3%, respectively.
The initial public offerings of Vikram Solar Ltd., Shreeji Shipping Global Ltd., Gem Aromatics Ltd., and Patel Retail Ltd. opened for subscription Tuesday and will close Thursday. The public offer of Mangal Electrical Industries Ltd. opened for subscription Wednesday and will close Friday.
However, some banks stepped in to buy the greenback on behalf of oil marketing companies and other importers, in order to take advantage of the relatively lower dollar/rupee levels, which capped the rise in the Indian currency. However, dollar purchases by importers were not aggressive in nature, as they expect the rupee to continue trading with an appreciation bias and rise above 86.90 a dollar going ahead.
"They (importers) are also now looking for downmove around 86.80-86.85 as market is also closing around 87 mark... So they are also expecting some appreciation in rupee," a dealer at a state-owned bank said. The rupee has appreciated almost 0.7% against the dollar so far this week.
Meanwhile, volume in the currency market was lower than usual as traders were uncertain about the near-term trajectory of the rupee, as it has been trading in a tight range of 86.92-87.05 a dollar, with no convincing breakout on either sides.
Market participants now await the Federal Reserve's Jackson Hole Economic Policy Symposium this week, where Fed Chair Jerome Powell is due to speak on Friday. Powell's speech on the economic outlook and the central bank's policy framework will be watched out for more cues on the Fed rate trajectory. "I think the rupee will move in one direction after the Jackson Hole event. Maybe it will go to 87.40 after that if Powell is not too dovish," a dealer at another private sector bank said.
During the day, the rupee is seen moving in a range of 86.80 and 87.20 against the greenback. Dealers peg key technical resistance for the domestic currency at 86.80 a dollar. (Pratiksha)
India Rupee: Technical levels for rupee - Aug 21
MUMBAI – At 1034 IST, the rupee was at 86.9600 per dollar. At 0900 IST, the rupee was at 87.0300 a dollar, against the previous close of 87.0650. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:
| Participants | S2 | S1 | R1 | R2 |
| State-owned bank | 87.40 | 87.15 | 86.90 | 86.80 |
| Private-sector bank | 87.30 | 87.25 | 86.90 | 86.80 |
| Brokerage firm | 87.50 | 87.20 | 86.80 | 86.50 |
| Brokerage firm | 87.40 | 87.10 | 86.90 | 86.85 |
(Pratiksha)
India Rupee: Rises above 87/$1 on cutting of long dollar bets, FX inflows
| AT 0940 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 86.9875 | 87.0300 | 86.9300 | 87.0425 | 87.0650 |
MUMBAI – The rupee rose against the dollar, moving above the 87-per-dollar mark, as banks sold the greenback on behalf of traders, who looked to cut their long dollar positions, dealers said. "The appreciation bias on rupee is playing out. It has sustained these levels, which is why people are no longer long on dollar," a dealer at a private sector bank said.
Including Thursday, the rupee has moved above the 87-per-dollar mark for the third consecutive trading day, reinstating traders' expectation that the appreciation bias for the rupee is here to stay. This has led to traders selling the greenback in order to trim their long dollar positions, dealers said.
Further, banks likely sold dollars for foreign fund inflows into Indian markets, which also supported the Indian unit, dealers said. "There has been some positivity in the market and we are seeing inflows coming," a dealer at a state-owned bank said. "If 86.90 (a dollar) breaks, I am expecting 86.50 kind of levels happening."
Some dealers said most importers may step in to buy dollars in case the rupee rises above 86.90 a dollar, capping further upmove in the Indian currency. The Indian unit has appreciated 0.7% against the dollar so far this week.
Market participants now awit the Federal Reserve's Jackson Hole Economic Policy Symposium this week. The Jackson Hole symposium, to be held Thursday-Saturday, will be watched out for, especially Fed Chair Jerome Powell's speech on the economic outlook and the central bank's policy framework on Friday. Traders, who have almost completely priced in a rate cut at Fed's September meeting, will see if Powell's comments push back against the same.
During the day, the rupee is seen moving in a range of 86.80 and 87.20 against the greenback. Dealers peg key technical resistance for the domestic currency at 86.80 a dollar. (Pratiksha)
India Rupee - Asia FX: Mixed ahead of Jackson Hole meet; Taiwan dollar down
MUMBAI – Asian currencies traded on a mixed note against the dollar Thursday as market participants awaited the Federal Reserve's Jackson Hole Economic Policy Symposium that is scheduled on Thursday-Saturday.
Investors have braced themselves for any market-moving news from the meeting, as Federal Reserve Chair Jerome Powell's speech is scheduled for Friday. Powell will speak on the economic outlook and the central bank's policy framework, and investors will look for cues on the Fed's rate cut trajectory. At 0855 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.31, against 98.22 Wednesday and 98.28 Tuesday.
The South Korean won fell 0.1% against the dollar Thursday. This was despite data released on Thursday showing that producer prices in South Korea were up 0.4% on month in July, in line with expectations and up from 0.1% in June.
The Taiwan dollar fell 0.7% against the dollar Thursday even after the economic affairs ministry said on Wednesday that the country's export orders rose for the sixth straight month in July. Export orders rose 15.2% on year during the month to $57.64 billion, broadly in line with analysts' expectations of a 15% increase.
The Indonesian rupiah was down 0.1% against the dollar after the central bank surprisingly cut interest rates again on Wednesday and signalled it could cut more. Bank Indonesia cut the benchmark 7-day reverse repurchase rate by 25 basis points to 5.00%, its fifth rate cut since September, taking it to its lowest level since late 2022.
Both the Philippine peso and the Thai baht traded flat against the greenback. (Rati Chaphekar)
India Rupee: Expected range for rupee - Aug 21
MUMBAI – Following are the expected support and resistance levels for the rupee on Thursday, as forecast by leading banks and brokerages in an Informist poll:
| PARTICIPANT | SUPPORT | RESISTANCE |
| State-owned bank | 87.15 | 86.90 |
| Private-sector bank | 87.25 | 86.90 |
| Private-sector bank | 87.17 | 86.98 |
| Foreign bank | 87.35 | 86.80 |
| Brokerage firm | 87.20 | 86.90 |
| Brokerage firm | 87.30 | 86.80 |
(Pratiksha)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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