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Informist, Thursday, Sept. 11, 2025

 

By Pratiksha

 

NEW DELHI - The rupee ended at a record closing low against the dollar Thursday as banks persistently bought dollars for foreign fund outflows and importers, dealers said. The Reserve Bank of India likely stepped in through dollar sales to prevent further losses in the currency, albeit not aggressively, they said. 

 

"There was constant buying (of dollars) in the market since morning. The impact was seen because RBI also let it (rupee) go," a dealer at a private-sector bank said. "Gradually, rupee will depreciate more."

 

After hitting a record low of 88.4550 a dollar during the day, the rupee ended at 88.4425 on Thursday, against 88.1000 Wednesday. Other Asian currencies fell 0.1-0.4% against the dollar, with the Indian rupee being the worst hit. 

 

The rupee opened largely steady against the dollar, but came under downward pressure shortly afterwards, as banks stepped in to buy dollars on behalf of importers, dealers said. Importers bought the greenback on fear that the Indian unit may depreciate further in the near term amid worries over US tariffs.

 

The rupee has fallen 0.3% against the dollar so far this month. US President Donald Trump has slapped an additional 25% punitive tariff on Indian goods, on top of a 25% reciprocal tariff, citing New Delhi's continued purchases of Russian crude oil. 

 

While Trump and Prime Minister Narendra Modi's recent comments have signalled a thaw in India-US trade relations, currency traders are not too optimistic due to Trump's mixed signals. Trump early Wednesday said his administration is continuing negotiations with India to address trade barriers, adding that he is looking forward to speaking with "very good friend" Modi in the coming weeks. Modi also said Wednesday the two countries' respective teams were working to conclude the discussions at the earliest. 

 

Amid the looming concerns on the tariff front, banks also bought dollars on behalf of foreign portfolio investors, looking to pull out funds from Indian markets, which weighed on the Indian unit, delaers said. So far in September, FPIs have pulled out $346.21 million from the domestic market, on a net basis. 

 

During the last two hours of trade, state-owned banks bought dollars for foreign fund outflows, likely from some defence corporates, following which the rupee fell to a record low. Dealers said traders' stop losses were triggered on short dollar bets around 88.35 a dollar, which exacerbated the Indian unit's fall. "People had shorted (short dollar bets) around 88.35, but once that level broke, it was a quick one-way movement," a dealer at a state-owned bank said. "There was just buying (of dollars) in the market whole day and practically no seller."

 

However, as the Indian unit fell to a record low, the RBI likely stepped in to sell dollars, which prevented the rupee from falling beyond the next technical support level of 88.50 a dollar, dealers said. However, they pointed out that the central bank's dollar sales were 'mild' in nature.

 

The dollar index edged higher in European trade, tracking losses in the euro and the yen, which also exerted downward pressure on the Indian unit, according to dealers. "I don't think there's anything in favour of rupee right now. It is just buying (of dollars) happening," a dealer at another private-sector bank said. "The buying since morning, no RBI and then the dollar index rising, all contributed to the rupee falling."

 

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.99, against 97.81 Wednesday and 97.74 Tuesday. Meanwhile, traders exercised caution ahead of the US inflation data for August, due later in the day, dealers said. Market participants await the key economic data to gauge the impact of tariffs on prices in the world's largest economy and for more cues on the quantum of rate cut by the US Federal Reserve next week.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.4425	88.1200	88.1200	88.4550	88.1000
1-year dlr/rupee fwd (paise)	204.57	203.57	205.44	203.57	202.97

 

FORWARDS

The one-year dollar/rupee forward premium ended at an over-four-month high as US Treasury yields fell Wednesday after data showed producer prices in the US unexpectedly fell in August, reinforcing expectations that the Fed will resume cutting interest rates next week, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

 

"There was just paying in the market, both due to US yields and the spot movement," a dealer at a private-sector bank said. The 10-year US bond yield declined to 4.04% Wednesday against 4.08% Tuesday. US Producer Price Index for final demand fell 0.1% on a monthly basis, after a downwardly revised 0.7% jump in July. Economists polled by Reuters had forecast the PPI would rise 0.3?ter a previously reported 0.9% surge in July.

 

Fed funds futures traders are now pricing in 92% chance of the Fed cutting interest rates by 25 basis points next week, with an 8% probability of a jumbo 50 bps cut, CME FedWatch showed. Market participants now await the release of the US inflation data for August. A Reuters poll showed headline US CPI of 0.3% last month and a year-on-year rise of 2.9%. In July, the US CPI rose 0.2% on month and 2.7% on year. 

 

Noting the sharp fall in the rupee, banks bought dollars for forward delivery on behalf of importers on expectation the local unit may depreciate further, dealers said. This also supported the forward premiums. 

 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.31%, against the previous close of 2.30%. On an absolute basis, the premium was 204.57 paise, against 202.97 paise Wednesday.

 

OUTLOOK

On Friday, the rupee will take cues from movement in the dollar index after the US inflation data, due later in the day, dealers said. "If the US CPI falls, there will be some support for the rupee, but eventually buying (of dollars) will come in," a dealer at another state-owned bank said. "The number has to be really good for rupee to sustain its gains." A dealer said that if the US CPI comes in line with expectations or even inches higher, the rupee may not be much affected as the 25 bps rate cut by the Fed this month is expected to materialise nevertheless. 

 

The local unit will also take cues from movement in other Asian currencies, they said. Market participants will continue to keep a close eye on developments related to US tariffs. Market participants also await the outcome of the the European Central Bank's interest rate decision later in the day, where it is expected to maintain status quo.

 

Dealers expect importers to continue buying dollars owing to the expectation that the Indian unit may depreciate in the near term amid worries related to US tariffs on India, keeping the downward pressure on the rupee intact. "Focus remains on the US CPI data, which could drive volatility in the dollar and in turn the rupee. Crude prices stayed volatile but hovered in lower zones, offering partial support. Market sentiment remains tied to updates on the US–India trade deal, which could trigger sharper moves," Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities, said in a note. 

 

Dealers expect the central bank to continue intervening through dollar sales to prevent the domestic unit from depreciating sharply. They have pegged key technical support for the rupee at 88.50 a dollar. During the day, the rupee may move in a range of 88.10 and 88.60 against the dollar.

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India Rupee - World FX: Euro falls ahead of ECB policy decision; yen dn 0.2%

 

	AT 1505 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3506	1.3540	1.3501	1.3522
EUR/USD	1.1688	1.1707	1.1684	1.1698
NZD/USD	0.5925	0.5947	0.5922	0.5936
AUD/USD	0.6601	0.6621	0.6601	0.6609
USD/JPY	147.9560	147.9650	147.2800	147.3390
USD/CAD	1.3886	1.3886	1.3859	1.3856
EUR/JPY	172.9400	172.9670	172.3560	172.4500
CHF/USD	1.2508	1.2524	1.2501	1.2507
EUR/CHF	0.9343	0.9351	0.9340	0.9342

 

MUMBAI – The euro fell 0.1% against the dollar ahead of the European Central Bank's interest rate decision later in the day, where it is expected to maintain status quo. However, the central bank is expected to keep alive the prospect of further easing amid uncertain trade and political outlook. 

 

The Japanese yen fell 0.2% against the dollar despite data Thursday showing wholesale inflation accelerated in August, keeping alive market expectations of a near-term interest rate hike. The food and beverages prices in the country rose 5% on year, compared to 4.7% in July. 

 

Bank of Japan's next policy meeting is on Sept. 18-19. A Reuters poll sees the central bank rasing interest rate by at least 25 basis points in Oct-Dec. 

 

Tracking a fall in the euro and the yen, the dollar index rose in European trade. Data Wednesday showed producer prices in the US unexpectedly fell in August, cementing expectations that the Fed will resume cutting interest rates next week. US producer price index for final demand fell 0.1% on a monthly basis, after a downwardly revised 0.7% jump in July. Economists polled by Reuters had forecast the PPI would rise 0.3?ter a previously reported 0.9% surge in July.

 

Fed funds futures traders are now pricing in an 92% chance of the Fed cutting interest rates by 25 basis points next week, with an 8% probability of a jumbo 50 bps cut, CME FedWatch showed. At 1505 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.91, against 97.81 Wednesday and 97.74 Tuesday. 

 

The pound sterling fell 0.1% against the greenback ahead of the Bank of England's policy outcome, due on Sept. 18, where it is expected to maintain status quo. The Australian dollar fell 0.1% against the greenback and the New Zealand dollar fell 0.2%.  (Rati Chaphekar)  

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India Rupee: Hits record low on dollar buys for importers, FX outflows

 

	AT 1430 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.4450	88.1200	88.1200	88.4550	88.1000

 

NEW DELHI – The rupee hit a record low against the dollar Thursday as banks persistently bought dollars for importers and foreign fund outflows from corporates, dealers said. "There were continous bids (dollar buying) in the market and RBI (Reserve Bank of India) was not seen in the market either," a dealer at state-owned bank said. 

 

Dealers said traders' stop losses were triggered on short dollar bets around 88.35 a dollar, following which the rupee hit a lifetime low of 88.4550 a dollar. Amid looming worries over the US tariffs, importers continuously bought the greenback on expectation that the Indian unit may depreciate further in the near term, weighing on the rupee, they said. 

 

Meanwhile, some dealers speculated that the Reserve Bank of India possibly intervened through dollar sales around 88.45 a dollar, which limited losses in the Indian currency. For the rest of the day, the rupee is seen moving in a range of 88.20-88.50 against the greenback. Dealers peg immediate technical support for the rupee at 88.50 a dollar. (Pratiksha) 

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India Rupee: Falls sharply as banks buy dollars for importers, FPI outflows

 

	AT 1330 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.3050	88.1200	88.1200	88.3325	88.1000

 

MUMBAI – The rupee fell sharply against the dollar, in line with its Asian peers, as banks persistently bought dollars on behalf of importers and foreign portfolio investors, dealers said. The Indian unit fell to 88.3325 a dollar during the day, within spitting distance of the lifetime low of 88.3650 it hit Friday. 

 

Banks bought dollars on behalf of importers, who fear a further fall in the Indian unit amid uncertainty regarding US tariffs on India, dealers said. "Importers are buying (dollars) since morning. I don't see rupee going above 88.00 (per dollar) now, there is a lot of uncertainty regarding the tariff situation." 

 

Amid the looming uncertainty, banks also bought dollars on behalf of foreign portfolio investors looking to pull out funds from Indian markets, which weighed on the domestic unit, dealers said. So far in September, FPIs have pulled out $346.21 million from the domestic market, on a net basis. 

 

Meanwhile, traders were cautious ahead of the US inflation data for August, due later in the day, dealers said. Market participants await the key economic data to gauge the impact of tariffs on prices in the world's largest economy and for more cues on the quantum of rate cut by the US Federal Reserve next week.

 

Fed funds futures traders are now pricing in a 92% chance of the Fed cutting interest rates by 25 basis points next week, with an 8% probability of a jumbo 50 bps cut, CME FedWatch showed. At 1330 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.91, against 97.81 Wednesday and 97.74 Tuesday. 

 

Most dealers expect the Reserve Bank of India to intervene through dollar sales around the 88.35-88.40 level, to prevent the Indian unit from depreciating further. "I am expecting aggressive selling (of dollars) around 88.36-88.40 from the regulator," a dealer at another private-sector bank said. "For now, only flows are dictating the movement (in rupee)." 

 

For the rest of the day, the rupee is seen moving in a range of 88.00-88.40 against the greenback. Dealers peg immediate technical support for the rupee at 88.35 a dollar.  (Rati Chaphekar)

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India Rupee: Technical levels for rupee - Sept 11

 

MUMBAI – At 1045 IST, the rupee was at 88.2200 per dollar. At 0900 IST, the rupee was at 88.1200 a dollar, against its previous close of 88.1000. 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	88.50	88.30	87.80	87.60
Private-sector bank	88.37	88.05	87.95	87.65
Private-sector bank	88.50	88.35	87.90	87.80
Brokerage firm	88.50	88.40	87.80	87.50

 

(Pratiksha and Rati Chaphekar)

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India Rupee - Asia FX:Most dn ahead of US CPI data; South Korean won dn 0.1%

 

MUMBAI - Most Asian currencies fell slightly against the dollar Thursday as the dollar index edged marginally higher ahead of the key US inflation data, due later in the day. The data will help market participants further assess the rate cut trajectory of the US Federal Reserve. 

 

A poll by Reuters showed the US headline CPI of 0.3% last month and a year-on-year rise of 2.9%. Meanwhile, data released Wednesday showed softer-than-expected US producer price index, cementing expectations that the Fed will resume cutting interest rates next week. The producer price index for final demand slipped 0.1% in August after it previously reported 0.9% surge in July. Economists polled by Reuters had forecast the PPI would advance 0.3%. 

 

Fed funds futures traders are now pricing in a 92% chance of interest rate cut by 25 basis points next week, with an 8% probability of a jumbo 50 bps cut, CME FedWatch showed. At 0949 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.85, against 97.81 Wednesday and 97.74 Tuesday. 

 

The South Korean won fell 0.1% against the dollar after Lee Soo-hyung, a member of the Bank of Korea's monetary policy board, Thursday said interest rates must be reduced to boost economic growth. "There is a need for additional responses to ease downward pressure on economic growth, as it is improving slightly but still expected to remain below potential," he said. Last month, the central bank held interest rates steady for a second consecutive meeting. 

 

The Philippine peso was down 0.1% against the greenback after data released Wednesday showed the country's unemployment rate hit a three-year high of 5.3% in July from 4.7% in the corresponding period a year ago. The number of unemployed individuals rose to 2.59 million in July.

 

The Indonesian rupiah traded broadly steady against the greenback. The country's new finance minister said late Wednesday that Indonesia might revise its $236 billion budget proposal for 2026. 

 

The Taiwan dollar and the Thai baht were down 0.1% against the greenback. The Chinese yuan and the Malaysian ringgit were flat against the dollar.  (Rati Chaphekar)

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India Rupee:Steady on caution before US CPI data; fall in Asian units weighs

 

	AT 0925 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.1325	88.1200	88.1200	88.1500	88.1000

 

NEW DELHI – The rupee was largely steady against the dollar as traders were cautious ahead of US inflation data for August, due later in the day, dealers said. Market participants await the key economic data to assess the impact of tariffs on prices in the world's largest economy and for more cues on the quantum of rate cut by the US Federal Reserve next week.

 

"I am seeing a move of 88.00-88.20 at maximum today. Overall, it should be range-bound and not move much before US CPI," a dealer at a state-owned bank said. "The market is not reacting much to the recent tariff news also."

 

A Reuters poll showed headline US CPI at 0.3% last month and a year-on-year rise of 2.9%. Fed funds futures traders are now pricing in a 92% chance of the Fed cutting interest rates by 25 basis points next week, with an 8% probability of a jumbo 50 bps cut, CME FedWatch showed. 

 

However, a slight fall in Asian currencies, tracking a marginal rise in the dollar index ahead of the key economic data, weighed on the Indian unit, dealers said. At 0925 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.85, against 97.81 Wednesday and 97.74 Tuesday. 

 

Uncertainty on the US tariff front, after mixed signals from US President Donald Trump, has also kept traders on the sidelines, dealers said. "Softer US job data and rising bets on Fed rate cuts are offering support (to the rupee), but ongoing tariff concerns could limit the scope for any meaningful recovery," according to Amit Pabari, CR Forex.

 

Trump on Tuesday reportedly called a meeting with senior officials from the US and the European Union and asked them to impose a sweeping 100% tariff on India and China for their purchase of oil from Russia. On the other hand, early Wednesday he said his administration was continuing negotiations with India to address trade barriers, adding that he was looking forward to speaking with "very good friend" Prime Minister Narendra Modi in the coming weeks.

 

For the rest of the day, the rupee is seen trading in a narrow range of 88.00 and 88.30 against the dollar. Dealers peg key technical support for the rupee at 88.20 against the greenback. (Pratiksha)

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India Rupee: Expected range for rupee - Sept 11

 

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	88.00
Private-sector bank	88.35	87.90
Foreign Bank	88.36	87.90
Brokerage firm	88.22	87.92
Brokerage firm	88.25	88.00

 

 

 

 

 

 

 

 

(Pratiksha and Rati Chaphekar)  

 

End

 

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

 

Edited by Vandana Hingorani

 

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