India Rupee Review
Ends down on persistent dollar purchases by importers
This story was originally published at 16:37 IST on 4 September 2025
Register to read our real-time news.Informist, Thursday, Sept. 4, 2025
By Gowri Lakshmi
MUMBAI – The rupee erased early gains and ended lower against the dollar Thursday as banks rushed to purchase dollars on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said. However, the rupee was supported due to improved investor sentiment, tracking gains in the domestic stock market after the GST Council on Wednesday approved moving to a two-slab goods and services tax rate structure, effective Sept. 22, dealers said.
"It was kind of tranquil today (Thursday) with not much flutter, importers are bidding at these levels cause they're really attractive for them, and exporters are holding their horses," a dealer at a private sector bank said.
After rising to a high of 87.9975 against the dollar, the Indian unit settled at 88.1450, down from its previous close of 88.0700 against the dollar. The domestic currency moved in a range of over 18 paise during the day.
Other Asian currencies traded mixed against the greenback during the day ahead of key economic data from the US due Friday. The Philippine peso was the biggest gainer, while the South Korean won was the worst hit amongst the regional peers.
The rupee opened steady against the dollar at 88.0700 as foreign fund inflows offset the impact of dollar demand from importers, dealers said. The rupee was supported as the GST Council approved the proposed two-slab tax structure with a new special tax rate of 40% for demerit goods, dealers said. The GST Council approved simplifying the GST structure from the current four slabs — 5%, 12%, 18% and 28% — to a two-rate structure — 5% and 18%. The rejig was a part of Prime Minister Narendra Modi's next-generation reforms, announced on Independence Day, to boost domestic demand in the economy.
Thursday, the benchmark equity indices, the Nifty 50 and the BSE Sensex, ended 0.1% and 0.2% higher compared to their previous close. However, dealers remained mixed about impact of the new tax reforms, with some dealers expecting appreciation of rupee owing foreign fund flows, while most dealers said rise in rupee may not sustain even if there are short term gains and exporters are already betting on a sharp depreciation of the rupee, with the domestic currency even breaching the crucial level of 89-per-dollar in the medium term.
Meanwhile, noting the rise of the rupee, importers rushed to purchase the greenback to make the most out of the relatively lucrative dollar/rupee levels, dealers said. This pushed the rupee to hit an intraday low of 88.1825.
The dollar index remained broadly steady, posting slight gains, ahead of the key US non-farm payrolls data, resulting in lower-than-usual volume, dealers said. Data released Wednesday showed job openings in the US fell to a 10-month low in July, although layoffs remained relatively low. The softer-than-expected job openings data weighed on the dollar index and reinforced expectations of a rate cut by the US Federal Reserve this month.
At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.22, against 98.14 Wednesday and 98.30 Tuesday. Fed funds futures traders now see a 97.6% probability of the US central bank lowering interest rates by 25 basis points this month, according to the CME FedWatch tool. "Dollar index stayed volatile near 98.25, with participants now focusing on the upcoming US nonfarm payrolls and unemployment data, which will set the tone for global currencies," Jateen Trivedi, vice president, research analyst from LKP Securities, said in a note.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 88.1450 | 88.0700 | 87.9975 | 88.1825 | 88.0700 |
| 1-year dlr/rupee fwd (paise) | 194.73 | 193.73 | 194.73 | 193.73 | 194.65 |
FORWARDS
The one-year dollar/rupee forward premium ended steady, despite a sharp fall in US Treasury yields Wednesday, as market participants refrained from placing large bets ahead of the US non-farm payroll report, dealers said. The 10-year US bond yield declined to 4.22% Wednesday against 4.28% Tuesday.
US Treasury yields fell sharply after data on Wednesday showed job openings in the US fell to a 10-month low in July. The softer-than-expected job openings data increased expectations of a rate cut by the US Federal Reserve this month. Fed funds futures traders now see a 97.6% probability of the US central bank lowering interest rates by 25 bps this month, according to the CME FedWatch tool. Forwards of a currency pair are reflective of the interest rate differential between the two countries.
Market participants have now turned their focus to the US non-farm payrolls report to gauge the odds of policy easing by the Fed. Dealers see 2.25% as a key technical support for the one-year forward premium in the near term.
Thursday, the one-year exact period dollar/rupee premium was 2.21%, unchanged from the previous close. On an absolute basis, the premium was 194.73 paise, against 194.65 paise Wednesday.
OUTLOOK
Friday, the rupee is expected to trade in a range of 87.85 and 88.45 against the greenback. Dealers expect importers to purchase dollars in order to take advantage of the relatively lower dollar/rupee levels, as they are wary of a sudden depreciation in the Indian unit.
However, the rupee is expected to be supported by foreign fund inflows into domestic financial markets, dealers said. Should the rupee come under pressure, dealers expect the RBI to step in with dollar sales to curb a sharp fall of the domestic currency. If the rupee inches toward 88.40 and below, exporters are likely to sell dollars, which will provide a further cushion for the rupee, dealers said.
Traders will watch out for any tariff-related or geopolitical developments which impact the investor sentiment, dealers said. Traders will also closely assess the upcoming US economic data to get clarity on the dollar's movements and the US Fed's rate outlook this month. Dealers peg key technical support for the Indian unit at 88.35 a dollar.
India Rupee - World FX: Dollar index steady before key econ data; yen falls
| AT 1520 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3439 | 1.3459 | 1.3417 | 1.3441 |
| EUR/USD | 1.1642 | 1.1669 | 1.1641 | 1.1658 |
| NZD/USD | 0.5858 | 0.5890 | 0.5858 | 0.5877 |
| AUD/USD | 0.6518 | 0.6550 | 0.6518 | 0.6541 |
| USD/JPY | 148.3220 | 148.4120 | 147.7920 | 148.0430 |
| USD/CAD | 1.3821 | 1.3821 | 1.3793 | 1.3788 |
| EUR/JPY | 172.6690 | 172.9330 | 172.4600 | 172.5620 |
| CHF/USD | 1.2420 | 1.2445 | 1.2414 | 1.2431 |
| EUR/CHF | 0.9373 | 0.9386 | 0.9372 | 0.9368 |
MUMBAI – The dollar index remained largely steady ahead of the key US non-farm payroll report due Friday. The index had fallen Wednesday after a softer-than-expected job openings data increased expectations of a rate cut by the US Federal Reserve this month.
Job openings have fallen by more than 300,000 over the past two months. Economists polled by Reuters had forecast 7.378 million unfilled jobs. Fed funds futures traders now see a 99.6% probability of the Fed lowering interest rates by 25 basis points this month, according to the CME FedWatch tool. At 1520 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.30, against 98.14 Wednesday and 98.30 Tuesday.
The Australian dollar fell 0.3% against the greenback despite data released Thursday showed Australia's trade surplus rose to A$7.3 billion in July, from a revised A$5.4 billion in June. That was well above market forecasts of a A$5.0 billion surplus. The New Zealand dollar fell 0.2% against the dollar.
The pound sterling fell 0.1% against the dollar after Bank of England Governor Andrew Bailey said on Wednesday that markets had understood his message that BoE interest rates would continue to move "downwards gradually over time" but that there was now less certainty about the speed of cuts. Last month, the UK central bank cut the bank rate by 25 basis points to 4.00% with a narrow margin of 5 to 4.
Bank of England survey showed on Thursday that the UK firms' expectations of inflation over the next year in the overall economy rose to 3.3%, up by 0.1 percentage points, in the three months to August.
The Japanese yen fell 0.1% against the dollar amidst political uncertainties in the country. The concerns came to the forefront after the Japanese ruling party's Secretary General Hiroshi Moriyama, a close aide of Prime Minster Shigeru Ishiba, Tuesday said he intends to resign from his post, potentially affecting the fate of Ishiba who has resisted calls to quit over an election loss. Both the euro and Swiss franc fell 0.1% against the dollar. (Rati Chaphekar)
India Rupee: Premium steady despite fall in US ylds; US jobs data in focus
| AT 1400 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 88.1150 | 88.0700 | 87.9900 | 88.1825 | 88.0700 |
| 1-year dlr/rupee fwd (paise) | 194.73 | 193.73 | 194.73 | 193.73 | 194.65 |
NEW DELHI – The one-year dollar/rupee forward premium was largely steady, despite a sharp fall in US Treasury yields Wednesday, as market participants refrained from placing large bets ahead of the key US non-farm payroll report, dealers said. The 10-year US bond yield declined to 4.22% Wednesday against 4.28% Tuesday.
"Nothing is happening in forwards. The market is already quite overpaid, which is why maybe we are not seeing any impact of the fall in US yields," a dealer at a private-sector bank said. "People are just looking for fresh cues on US rates now. Unless the expectation shifts to a 50 bps cut (in the US), we may not see much of a rise in forwards."
US Treasury yields fell sharply after data on Wednesday showed job openings in the US fell to a 10-month low in July. The softer-than-expected job openings data increased expectations of a rate cut by the US Federal Reserve this month. Fed funds futures traders now see a 97.6% probability of the US central bank lowering interest rates by 25 bps this month, according to the CME FedWatch tool. Forwards of a currency pair are reflective of the interest rate differential between the two countries.
Market participants have now turned their focus to the US non-farm payrolls report to gauge the odds of policy easing by the Fed. Dealers see 2.25% as a key technical support for the one-year forward premium in the near term.
At 1400 IST, the one-year exact period dollar/rupee premium was 2.21%, unchanged from the previous close. On an absolute basis, the premium was 194.73 paise, against 194.65 paise Wednesday. (Pratiksha)
India Rupee: Falls after erasing gains as importers continuously buy dollars
| AT 1320 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 88.1550 | 88.0700 | 87.9900 | 88.1825 | 88.0700 |
MUMBAI – The rupee fell against the dollar, giving up all its earlier gains, as banks persistently bought dollars on behalf of importers, noting the relatively lower dollar/rupee levels, dealers said. The Indian currency had risen to 87.9900 a dollar earlier Thursday.
"There has been importer demand (for dollars) since morning," a dealer at a private sector bank said. "But now rupee has become rangebound only." The Indian currency has moved in a range of 19 paise so far on Thursday.
Meanwhile, some banks sold dollars, likely for foreign portfolio investors, looking to invest in the Indian market, as risk sentiment was upbeat after the GST Council Wednesday approved a move to a two-slab goods and services tax rate structure with a new special tax of 40% to be effective from Sept. 22, dealers said. The panel approved simplifying the GST structure from the current four slabs — 5%, 12%, 18% and 28% — to a two-rate structure — 5% and 18%.
At 1320 IST, the Nifty 50 and Sensex were 0.4% and 0.5% higher, respectively. "We saw some FII inflows in the morning, but it was not a lot," a dealer at a state-owned bank said.
Market participants now await the key US non-farm payrolls data, due Friday, for more cues on the Federal Reserve's rate trajectory. For the rest of the day, the rupee is seen moving in a range of 87.90-88.30 against the greenback. Dealers peg key technical support for the rupee at 88.30 a dollar. (Pratiksha and Rati Chaphekar)
India Rupee: Technical levels for rupee - Sept 4
NEW DELHI – At 1055 IST, the rupee was at 88.1375 per dollar. At 0900 IST, the rupee was at 88.0700 a dollar, unchanged from its previous close. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:
| Participants | S2 | S1 | R1 | R2 |
| Public-sector bank | 88.35 | 88.20 | 87.90 | 87.80 |
| Foreign bank | 88.50 | 88.30 | 87.80 | 87.50 |
| Brokerage firm | 88.60 | 88.40 | 87.50 | 87.00 |
| Brokerage firm | 88.30 | 88.20 | 87.80 | 87.50 |
(Pratiksha)
India Rupee: Rises slightly on gains in domestic equities after GST rejig
| AT 0940 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 88.0225 | 88.0700 | 87.9975 | 88.0750 | 88.0700 |
India Rupee: Rises slightly on gains in domestic equities after GST rejig
NEW DELHI – The rupee rose slightly against the dollar Thursday, tracking gains in domestic equities after the GST Council Wednesday approved a move to a two-slab goods and services tax rate structure with a new special tax of 40% to be effective from Sept. 22, dealers said.
The panel approved simplifying the GST structure from the current four slabs — 5%, 12%, 18% and 28% — to a two-rate structure — 5% and 18%. The rejig was a part of Prime Minister Narendra Modi's next-generation reforms, announced on Independence Day, to boost domestic demand in the economy, businesses, and micro, small and medium enterprises.
At 0940 IST, both the Nifty 50 and the Sensex were up 0.8?ch. "There is some appreciation expected from the GST changes, but since mostly it was already known and nothing was unexpected, I don't think it will lead to major gains (in the rupee)," a dealer at a state-owned bank said.
However, dealers expect gains in the Indian currency to be capped by dollar purchases on behalf of importers, noting the relatively lower dollar/rupee levels. "I think the rupee will rise to 87.85-87.90 kind of levels, and then importers will come in," a dealer at another state-owned bank said. The rupee opened flat at 88.0700 a dollar and rose to a high of 87.9975 shortly after.
Market participants now await the key US non-farm payrolls data, due Friday, for more cues on the Federal Reserve's rate trajectory. For the rest of the day, the rupee is seen moving in a range of 87.80-88.20 against the greenback. Dealers peg key technical resistance for the rupee at 87.80 a dollar. (Pratiksha)
India Rupee - Asia FX: Mixed ahead of US econ data; South Korean won rises
MUMBAI – Asian currencies moved on a mixed note against the US dollar as market participants await key US non-farm payrolls data, due Friday, for more cues on the Federal Reserve's rate trajectory.
Data relased Wednesday showed job openings in the US fell to a 10-month low to 7.18 million in July. Job openings have fallen by more than 300,000 over the past two months. Economists polled by Reuters had forecast 7.378 million unfilled jobs.
The softer-than-expected job openings data weighed on the dollar index and increased expectations of a rate cut by the US Federal Reserve this month. Fed funds futures traders now see a 97.6% probability of the Fed lowering interest rates by 25 basis points this month, according to the CME FedWatch tool. At 0915 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.22, against 98.14 Wednesday and 98.30 Tuesday.
The Malaysian ringgit fell 0.1% against dollar ahead of Bank Negara Malaysia's monetary policy committee meeting later in the day, with the panel expected to maintain the overnight policy rate at 2.75%. The Philippine peso rose 0.2% against the greenback ahead of the country's August inflation data on Friday. The Thai baht and the Chinese yuan traded broadly steady against the greenback.
The Indonasian rupiah fell 0.2% against the dollar amid nationwide protests in the country. Protests have continued this week, with police firing tear gas at crowds near two universities in Bandung, about 140 km west of Jakarta.
The South Korean won rose 0.3% against the greenback after Vice Finance Minister Lee Hyoung-il said in an interview to Reuters that authorities would continue to monitor foreign exchange markets and "act to stabilise markets if needed", while conducting talks with the US Department of the Treasury on the dollar-won market. He added the government would review whether the dollar-won trading hours could be further extended, as part of Seoul's push to be included in MSCI's developed market benchmarks. (Rati Chaphekar)
India Rupee: Expected range for rupee - Sept 4
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 | 88.20 | 87.90 |
| State-owned bank | 88.20 | 87.90 |
| State-owned bank | 88.30 | 87.90 |
| Private-sector bank | 88.35 | 87.90 |
| Foreign bank | 88.35 | 87.80 |
| Brokerage firm | 88.22 | 87.92 |
| Brokerage firm | 88.40 | 87.90 |
(Pratiksha and Rati Chaphekar)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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