India Rupee Review
Ends near two-week low on importers' dollar purchases
This story was originally published at 17:13 IST on 25 August 2025
Register to read our real-time news.Informist, Monday, Aug. 25, 2025
By Gowri Lakshmi
MUMBAI – The rupee ended near a two-week low as banks purchased dollars on behalf of oil marketing companies and other importers, dealers said. However, a broadly weak dollar supported the Indian unit during the day, dealers said. "Importers profit-booked at lower levels in the morning, hence it has come down now. Rupee's gains were never meant to sustain," a dealer at a private sector bank said.
After rising to a high of 87.3350 against the greenback, the Indian unit settled at 87.5800, the lowest closing level since Aug. 12. The domestic currency ended at 87.5300 on Friday. The rupee traded in a relatively wider range of nearly 28 paise during the day.
Most other Asian currencies traded higher against the US unit due to a fall in the dollar index. Other Asian currencies gained 0.2-0.6%, with the Indonesian rupiah being the biggest gainer.
The rupee opened sharply higher against the dollar at 87.3900, due to a decline in the dollar index after US Federal Reserve Chair Jerome Powell hinted at a likely interest rate cut by the Fed at its Federal Open Market Committee next month.
"The stability of the unemployment rate and other labour market measures allows us to proceed carefully as we consider changes to our policy stance," Powell said, speaking at the Fed's annual conference in Jackson Hole symposium on Friday. "Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."
According to the CME FedWatch tool, traders now see a 85.3% probability of the US Fed lowering the benchmark lending rates by 25 basis points, against 73?fore Powell's speech. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.99, broadly steady from 97.73 Friday but down from 98.62 Thursday.
Noting the appreciating of the rupee, a few banks purchased the dollar on behalf of importers, who wanted to make the most out of the relatively lower dollar/rupee levels, dealers said. Some oil marketing companies also purchased dollars, anticipating a sharp depreciation of the rupee ahead of the imposition of the additional 25% punitive tariff by the US on Wednesday, dealers said.
US President Donald Trump has slapped the additional 25% tariff on Indian goods, on top of the 25% tariff announced previously, citing New Delhi's continued purchases of Russian energy. The additional tariff is set to come into effect Wednesday. "Mostly the worries and uncertainty around the tariffs has been priced in, unless we wake up to a higher tariff, the rupee may not go to 88 (a dollar) quickly," a currency trader at a broking firm said.
The rupee was further weighed as sentiments were hit after Fitch Ratings Monday affirmed India's long-term foreign-currency issuer default rating at 'BBB-' with a stable outlook, dealers said. Fitch said India's fiscal metrics are a credit weakness, with high deficits, debt and debt service compared to its 'BBB' peers. "Lagging structural metrics, including governance indicators and GDP per capita, also constrain the rating," it said. "India's ratings are supported by its robust growth and solid external finances."
On Aug. 14, S&P Global Ratings had upgraded India's long-term unsolicited sovereign credit rating to 'BBB' from 'BBB'. Some dealers said market participants expected Fitch's rating would be similar to that of S&P Global Ratings while other dealers said "even though there was no big expectation, the status quo was disappointing."
However, a few dealers speculated that the Reserve Bank of India likely sold dollars at around 87.60 a dollar, to limit the rupee's fall. They also said despite the fall of the Indian unit, most exporters remained on the sidelines, awaiting further depreciation in the coming days.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.5800 | 87.3900 | 87.3350 | 87.6125 | 87.5300 |
| 1-year dlr/rupee fwd (paise) | 192.81 | 189.81 | 193.26 | 189.81 | 187.18 |
FORWARDS
The one-year dollar/rupee forward premium ended at an over 15-week high, tracking a fall in the 10-year benchmark US Treasury yield, dealers said. US Treasury yield fell 7 basis points to 4.26% Friday after US Fed Chair Powell hinted at an interest rate cut at Fed's meeting next month. Premium of a currency pair reflects the interest rate differential between two countries.
Importers also purchased dollars for forward delivery, noting the rupee's appreciation in the spot market, which also supported the forward premiums, dealers said. The rupee rose to a high of 87.3375 a dollar in spot market earlier in the day due to weakness in the dollar index. The one-year forward dollar premium hit a high of 2.21%, its highest level since May 9. However, noting the relatively higher dollar/rupee premium level, a few exporters sold forward dollars, which capped the rise in premiums, dealers said.
The one-year exact period dollar/rupee premium ended at 2.20%, against its previous close of 2.13%. On an absolute basis, the premium was 192.81 paise, against 187.18 paise Friday.
OUTLOOK
On Tuesday, the rupee will take cues from the movement of the dollar index and crude oil prices, dealers said. Dealers expect rupee to be weighed down by importers' dollar purchases, anticipating a sharp and sudden fall of the domestic currency. Dealers also expect foregn fund outflows from the domestic financial market as uncertainty about the additional US tariffs loom ahead of its imposition on Wednesday.
Traders will closely watch out for any tariff and geopolitical-related news fromt the US, dealers said. "The rupee continues to be plagued by the US tariffs on India thus impacting the sentiment despite other currencies rising against the dollar," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said in a note.
However, dealers also expect public-sector banks to step in with dollar sales, likely on behalf of the RBI, to prevent the rupee from inching toward the pscyhologically crucial level of 88-per-dollar.
During the day, the rupee is seen moving in a range of 87.40-87.80 against the dollar. Dealers peg key technical support for the Indian unit at 87.80 a dollar.
India Rupee - World FX: Pound sterling falls after BoE Bailey's comments
| AT 1540 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3493 | 1.3527 | 1.3430 | 1.3523 |
| EUR/USD | 1.1695 | 1.1727 | 1.1690 | 1.1721 |
| NZD/USD | 0.5860 | 0.5880 | 0.5852 | 0.5865 |
| AUD/USD | 0.6490 | 0.6505 | 0.6470 | 0.6491 |
| USD/JPY | 147.3560 | 147.5400 | 146.8440 | 146.9640 |
| USD/CAD | 1.3832 | 1.3851 | 1.3822 | 1.3832 |
| EUR/JPY | 172.3460 | 173.0246 | 172.1142 | 172.3000 |
| CHF/USD | 1.2463 | 1.2476 | 1.2443 | 1.2470 |
| EUR/CHF | 0.9384 | 0.9406 | 0.9380 | 0.9398 |
MUMBAI – The pound sterling fell 0.3% against the dollar Monday. Bank of England Governor Andrew Bailey said at the Jackson Hole Economic Policy Symposium Saturday that the UK is facing an "acute challenge" from its weak underlying economic growth and a fall in the number of workers since the pandemic. Bailey said the central bank had turned its focus away from long-term trends in unemployment to looking at levels of labour force participation instead.
The European Central Bank is likely to keep interest rates on hold next month but discussions about further cuts may well resume in the autumn if the economy weakens, Reuters reported citing sources Saturday. Despite this, euro fell 0.1% against the dollar Monday. European Central Bank President Christine Lagarde had said in July the Eurozone's central bank was "in a good place" as it left its key rate at 2%.
The dollar index edged slightly higher but remained broadly weak after the US Federal Reserve Chair Jerome Powell hinted at a possible rate cut by the central bank at its meeting next month. "The stability of the unemployment rate and other labour market measures allows us to proceed carefully as we consider changes to our policy stance," Powell said in his speech at the Jackson Hole Symposium in Wyoming on Friday. "Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."
US Fed funds futures traders are now pricing in an 87.2% probability of a 25-basis-point cut at the Fed's September meeting, against 73?fore Powell's speech, according to the CME Group's FedWatch Tool. At 1540 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.93, against 97.73 Friday and 98.62 Thursday. The Australian dollar rose 0.1% Monday against the dollar, tracking weakness in the dollar index. The New Zealand dollar fell 0.1% and Swiss franc fell 0.2% against the greenback.
The Japanese yen fell nearly 0.3% against the US dollar despite Bank of Japan Governor Kazuo Ueda saying on Saturday that wage hikes are spreading beyond large firms in Japan and likely to keep accelerating due to a tightening job market. Ueda's remarks at the Jackson Hole symposium have reinforced market expectations that the central bank will resume a rate-hike cycle in its September session. (Rati Chaphekar)
India Rupee: Premium at 15-week high as US ylds fall post Powell's comments
| AT 1332 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.5150 | 87.3900 | 87.3350 | 87.5150 | 87.5300 |
| 1-year dlr/rupee fwd (paise) | 191.81 | 189.85 | 192.31 | 189.85 |
187.18 |
MUMBAI – The one-year dollar/rupee forward premium rose to an over 15-week high, tracking a fall in the 10-year benchmark US Treasury yield, dealers said. US Treasury yield fell 7 basis points to 4.26% Friday after US Federal Reserve Chair Jerome Powell hinted at an interest rate cut at Fed's meeting next month. Premium of a currency pair is the interest rate differential between the two countries.
"The US yields and Indian yields are moving in opposite direction and with US yields falling, the interest differential and premium is also pushed higher," a currency trader at a broking firm said.
Speaking at the Fed's annual meeting in Jackson Hole, Powell said that while the US unemployment remains low, "with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance." "The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance," he added.
According to the CME FedWatch tool, traders now see 84.7% probability of the US Federal Open Market Committee lowering the benchmark lending rates by 25 bps at its Sept. 17 meeting, against 73?fore Powell's speech.
Importers also purchased dollars for forward delivery, noting the rupee's appreciation in the spot market, which also supported the forward premiums, dealers said. The rupee rose to a high of 87.3375 a dollar in spot market earlier in the day due to weakness in the dollar index.
The one-year forward dollar premium hit a high of 2.20%, its highest level since May 9. However, noting the relatively higher dollar/rupee premium level, a few exporters sold forward dollars, which capped the rise in premiums, dealers said. "There is some receiving, but it is more payers hence the premium is remaining high," another currency trader at another broking firm said.
Dealers see 2.20% as a key technical support and 1.75% as key resistance for the one-year forward premium in the near-term. At 1331 IST, the one-year exact period dollar/rupee premium was 2.19%, against its previous close of 2.13%. On an absolute basis, the premium was 191.81 paise, against 187.18 paise Friday. (Gowri Lakshmi)
India Rupee: Technical levels for rupee - Aug 25
MUMBAI – At 1045 IST, the rupee was at 87.4400 per dollar. At 0900 IST, the rupee was at 87.3900 a dollar, against the previous close of 87.5300. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:
| Participants | S2 | S1 | R1 | R2 |
| Private-sector bank | 87.90 | 87.75 | 87.00 | 86.50 |
| Foreign bank | 87.70 | 87.50 | 87.10 | 87.00 |
| Brokerage firm | 87.60 | 87.50 | 87.05 | 87.00 |
| Brokerage firm | 87.60 | 87.40 | 87.00 | 86.70 |
(Pratiksha)
India Rupee: Sharply up as dollar index falls after Powell hints at rate cut
| AT 0930 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.3475 | 87.3900 | 87.3375 | 87.3950 | 87.5300 |
MUMBAI – The rupee rose sharply against the dollar as the dollar index declined after Federal Reserve Chair Jerome Powell hinted at a possible rate cut by the US central bank at its meeting next month, dealers said.
"The stability of the unemployment rate and other labour market measures allows us to proceed carefully as we consider changes to our policy stance," Powell said in his speech at the Jackson Hole Symposium in Wyoming on Friday. "Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."
Fed funds futures traders are now pricing in an 87.2% probability of a 25-basis-point cut at the Fed's September meeting, against 73?fore Powell's speech, according to the CME Group's FedWatch Tool. At 0930 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.85, against 97.73 Friday and 98.62 Thursday.
However, the Indian currency may not be able to notch further gains owing to uncertianty ahead of the Wednesday's deadline for additional US tariff on India, dealers said. US President Donald Trump has slapped a 25% punitive tariff on Indian goods, on top of a 25% tariff announced previously, citing New Delhi's continued purchases of Russian oil.
"The whole tariff uncertainty still looms large on India. I don't think we will be able to sustain these gains (in rupee)," a dealer at a state-owned bank said. "I am seeing depreciation in rupee after a point towards 87.50 kind of levels."
Amit Pabari, managing director at CR Forex, said the near-term direction of the rupee would depend on two key events – the implementation of the Aug. 27 tariff and upcoming US economic data ahead of the Fed's Sept. 17 meeting. He sees immediate support for rupee at 87.40, with a break potentially extending the move toward 87.60.
Dealers expect gains in the Indian currency to be capped as importers may rush to buy dollars to take advantage of the relatively lower dollar/rupee levels. "I think we will see demand (for dollars) around these levels, pushing rupee back to 87.50. If there are some inflows in the market, only then 87.00-87.10 kind of levels will hold," a dealer at another state-owned bank said.
Most Asian currecies gained against the dollar, rising 0.1-0.6%, which also supported the local unit, according to dealers. During the day, the rupee is seen moving in a range of 87.10 and 87.50 against the greenback. Dealers peg key technical resistance for the domestic currency at 87.10 a dollar. (Pratiksha)
India Rupee - Asia FX: Most up as dollar down after Powell hints at rate cut
MUMBAI – Most Asian currencies rose against the dollar Monday as the dollar index fell after the much-awaited speech by Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium. Powell hinted at a September interest rate cut but stopped short of committing, striking a careful balance between mounting job-market risks and lingering inflation worries.
"The stability of the unemployment rate and other labor market measures allow us to proceed carefully as we consider changes to our policy stance," Powell said at the Fed's annual conference in Wyoming Friday. "Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."
Fed funds futures traders are now pricing in an 87% probability of a 25-basis-point cut at the US central bank's September meeting, against 73?fore the speech, according to the CME Group's FedWatch Tool. At 0812 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.88, against 97.73 Friday and 98.62 Thursday. US President Donald Trump's threat to fire Fed Governor Lisa Cook amid allegations over mortgages held by the latter in Michigan and Georgia also weighed on the dollar.
The Malaysian ringgit and the Indonesian rupiah rose 0.6?ch against the greenback, the highest among their peers, while the Philippine peso rose 0.5% against the dollar. Market participants await the Bangko Sentral ng Pilipinas' policy meeting Thursday, when it is expected to deliver a third straight rate cut. The Taiwan dollar and Chinese yuan rose against the greenback by 0.4% and 0.1%, respectively.
Bucking the trend, the South Korean won slipped 0.2% against the dollar amid heightened uncertainty ahead of the South Korea-US summit to be held later in the day. The summit will further decide the trajectory of Trump's idea to "modernise" the South Korea–US alliance, which could require South Korea to bear higher defence costs and prompt a restructuring of the 28,500 US troops stationed on the peninsula as the US ramps up efforts to counter China's expanding influence. (Rati Chaphekar)
India Rupee: Expected range for rupee - Aug 25
MUMBAI – Following are the expected support and resistance levels for the rupee on Monday, as forecast by leading banks and brokerages in an Informist poll:
| PARTICIPANT | SUPPORT | RESISTANCE |
| State-owned bank | 87.50 | 87.10 |
| Private-sector bank | 87.60 | 87.10 |
| Private-sector bank | 87.50 | 87.10 |
| Foreign bank | 87.60 | 87.10 |
| Brokerage firm | 87.40 | 87.00 |
| Brokerage firm | 87.51 | 87.18 |
(Pratiksha)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
