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Informist, Wednesday, Sept. 24, 2025

By Rati Chaphekar and Pratiksha

MUMBAI – Strong dollar demand from importers and foreign portfolio investors notwithstanding, the rupee ended slightly higher against the dollar Wednesday as public sector banks persistently sold dollars, likely on behalf of the Reserve Bank of India, dealers said.

The Indian unit ended at 88.6900 a dollar on Wednesday, after touching a low of 88.7775 during the day, not too far from its record low of 88.7975. The Indian unit closed at 88.7550 on Tuesday. 

"There was RBI's presence throughout. No other seller (of dollars) was there in the market. Market was completely on the buying (of dollars) side," a dealer at a private-sector bank said. Other Asian currencies fell 0.1-0.5% against the greenback, with the Thai baht being the worst performer.  

Shortly before the domestic spot market opened, the rupee was trading around 88.90 in the offshore non-deliverable forwards market. However, in the spot market, the local unit opened flat against the dollar as public sector banks stepped in to sell dollars in the NDF market, likely on behalf of the RBI.

The central bank also extended the dollar sales intervention in the spot market, pushing the rupee to the day's high of 88.6725. However, these gains were soon erased as importers rushed to buy dollars, noting the relatively lower dollar/rupee levels, dealers said. 

Dealers said there was continuous demand for dollars from importers, as they feared a further depreciation of the domestic currency. The Indian unit has come under downward pressure as investors' risk appetite has taken a hit due to uncertainty about the India-US trade deal and a hefty hike in the fee for new H-1B visas by the US, dealers said. The US has imposed a $100,000 fee for new visas, mandatory for companies that want to hire workers under the H-1B visa programme. So far this month, the Indian unit has depreciated 0.6% against the US unit. 

"Unless anything happens on the trade deal front, there's no respite for the rupee in my opinion," a dealer at another private-sector bank said. "This is why, even after we are seeing appreciation in the rupee in some sessions, the levels always reverse."

Moreover, banks continued to buy dollars for FPIs, who wanted to pull money out of the domestic markets amid uncertainty on the US tariff front, dealers said. On Wednesday, both the Nifty 50 and Sensex ended 0.5% lower each.

The dollar index edged higher during European trade after Federal Reserve Chair Jerome Powell struck a cautious tone on further easing on Tuesday, which also weighed on the local unit. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.61 against 97.22 Tuesday and 97.30 Monday. 

However, despite all these factors, the Indian unit did not fall to its lifetime low, likely due to the RBI's continuous intervention in the spot market, according to dealers. After volatile trading on Tuesday, the RBI maintained its stranglehold on the Indian currency throughout the day, they said. The rupee moved in a range of just 10 paise during the day. Some dealers said the central bank may have sold around $1.0 billion-$1.5 billion in the spot market Wednesday. 

"RBI was there a lot today, it is clear they want to maintain this (88.75) level, so the chances of the rupee crossing 89.00 a dollar in the near future are slim now," a dealer at a state-owned bank said.

FORWARDS

The one-year dollar/rupee forward premium ended largely steady as the impact of banks' dollar sales for forward delivery on behalf of exporters offset the impact of a fall in US Treasury yields, dealers said. Exporters sold forward dollars, noting the relatively higher levels and the recent depreciation in the rupee, they said. The one-year forward premium has been on an upward trend, rising almost 15 basis points so far this month. 

Some traders sold forward dollars on the expectation that the RBI's Monetary Policy Committee may consider a 25-basis-point rate cut at its meeting next week. Forwards of a currency pair reflect the interest rate differential between the two countries. According to a poll by Informist, the majority of economists expect the Monetary Policy Committee to keep interest rates on hold for the second consecutive meeting next month, as the June quarter GDP growth was much quicker than expected. However, four of the 15 economists polled said they expected a 25-bps rate cut. 

On Tuesday, US Treasury yields fell as data showed that US business activity slowed in September. The 10-year US bond yield fell to 4.12% from 4.15% Monday.

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.34%, unchanged against the previous close. On an absolute basis, the premium was 208.71 paise against 207.42 paise Tuesday. 

OUTLOOK

On Thursday, the rupee will take cues from movement in the dollar index and other Asian currencies, dealers said. Risk aversion may continue to prompt FPIs to withdraw funds from Indian markets, which could weigh on the Indian unit, they said. 

Market participants may continue to closely monitor developments in the India-US trade negotiations. "The trend for rupee continues to be bearish, considering the fact that trade and visa issues are still to be resolved and FPIs are constant sellers in equity," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said in a note. "The rupee is expected in a range of 88.50 to 89.00 tomorrow (Thursday) with a close watch on the trade negotiations and the RBI." 

Dealers expect importers to continue buying dollars, wary of a further fall in the rupee. However, dealers expect the RBI to intervene through dollar sales and prevent the rupee from inching closer to the psychologically-crucial 89.00 a dollar. 

On Thursday, the rupee is expected to move within a range of 88.50 to 89.00 against the dollar, with immediate technical support for the rupee pegged at 88.80 per dollar. 

India Rupee - World FX: Australian dollar up 0.2% post CPI data; yen falls

MUMBAI – The Australian dollar rose 0.2% against the greenback after data Wednesday showed consumer prices in Australia rose at the fastest annual pace in a year in August, prompting market participants to pare bets of an imminent policy easing.

Australia's consumer price index-based inflation rose 3.0% on year in August, against a rise of 2.8% in July and the median forecast of a 2.9% rise. The data strengthened investors' expectations that the Australian central bank will keep the key policy rates unchanged in its meeting scheduled next week.

The dollar index edged higher in European trade as US Federal Reserve Chair Jerome Powell struck a cautious tone on further easing in interest rates, saying the central bank needs to continue balancing the competing risks of high inflation and a faltering job market in coming policy decisions. Further, the S&P Global's flash US Composite Purchasing Managers' Index showed signs of an economic slowdown in the US. At 1445 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.56 against 97.22 Tuesday and 97.30 Monday.

The euro fell 0.4% against the dollar, tracking a fall in domestic equities and rise in dollar index. At 1445 IST, UK's FTSE 100 Index, Germany DAX Performance Index, and France's CAC 40 were down 0.2-0.3%, mainly tracking an overnight fall on the Wall Street. The pound sterling and the Swiss franc were down 0.3% each against the greenback.

The Japanese yen fell 0.4% against the dollar after the S&P Global flash Japan manufacturing Purchasing Managers' Index fell to 48.4 in September from 49.7 in August. A figure below 50.0 indicates contraction in the economy. The country's manufacturing sector activity for September fell at the fastest pace in six months, primarily because of a further decline in new orders. However, the impact of US tariffs on the export-reliant economy still remains uncertain.

The New Zealand dollar was steady against the US dollar after the appointment of Swedish central banker Anna Breman as the new governor of Reserve Bank of New Zealand.  (Rati Chaphekar)

India Rupee:Steady as fwd dollar sales by exporters offset fall in US yields

NEW DELHI – The one-year dollar/rupee forward premium was largely steady as the impact of banks' dollar sales for forward delivery on behalf of exporters offset the impact of a fall in US Treasury yields, dealers said. Exporters sold forward dollars, noting the relatively higher levels and the recent depreciation in the rupee, they said.

"The levels have stabilised on the far forwards. We are just seeing some profit booking around these levels. The spot (dollar/rupee) has also moved higher," a dealer at a private-sector bank said. The one-year forward premium has been on an upward trend, rising almost 15 basis points so far this month. The Indian currency fell to a lifetime low of 88.7975 a dollar on Tuesday.

Further, some traders sold forward dollars on the expectation that the Reserve Bank of India's Monetary Policy Committee may go for a 25 basis points rate cut at its meeting next week. Forwards of a currency pair are reflective of the interest rate differential between the two countries. In a poll by Informist, majority of economists said the Monetary Policy Committee is likely to keep interest rates on hold for the second consecutive meeting next month after the GDP grew much quicker than expected in the June quarter. However, four of the 15 economists polled said they expected a 25-bps rate cut. 

On Tuesday, US Treasury yields fell as data showed US business activity slowed in September. The 10-year US bond yield fell to 4.12% from 4.15% Monday.

At 1355 IST, the one-year exact period dollar/rupee forward premium was 2.33%, against the previous close of 2.34%. On an absolute basis, the premium was 208.21 paise against 207.42 paise Tuesday.  (Pratiksha)

India Rupee: Steady as RBI's likely dollar sales offset importers' dlr buys

MUMBAI – The rupee was largely steady against the dollar as the Reserve Bank of India's likely dollar sales offset the impact of persistent dollar buys by importers and foreign portfolio investors, dealers said. "There is high demand (for dollars) from importers and some by FPIs too, but nationalised banks are selling continuously," a dealer at a private sector bank said. "If people buy (dollars) at dip (in dollar/rupee) at 88.65-88.70 a dollar, then we might see further depriciation (of rupee) till 88.90." 

Banks bought dollars on behalf of importers in fear that the Indian unit may depreciate further in the coming days, dealers said. The Indian unit fell to a lifetime low of 88.7975 a dollar on Tuesday. 

Moreover, banks bought dollars on behalf of FPIs, who wanted to pull out funds from domestic equities, which weighed on the local unit, they said. At 1315 IST, the Nifty 50 and the Sensex were down 0.2% each. 

Meanwhile, the central bank continued to sell dollars through state-owned banks in the domestic spot market, which prevented the local unit from hitting a record low, dealers said. The central bank had also sold dollars in the offshore non-deliverable forwards market before the domestic spot market opened to support the rupee, they said. After volatile trading on Tuesday, most dealers expect the RBI to keep its stranglehold intact on the Indian currency through the day. 

The rupee has come under downward pressure against the dollar as investors' risk appetite has taken a hit due to uncertainty about the India-US trade deal and a hefty hike in the fee for new H-1B visas by the US, dealers said. The US has imposed a $100,000 fee for new H-1B visas, mandatory for companies that want to hire workers under the H-1B visa programme.

During the day, the rupee is seen moving in a range of 88.50 and 88.90 against the greenback. Dealers peg immediate technical resistance for the rupee at 88.60 a dollar, and support at 88.90. (Rati Chaphekar)

India Rupee: Technical levels for rupee - Sept 24

MUMBAI – At 1115 IST, the rupee was at 88.7300 per dollar. At 0900 IST, the rupee was at 88.7550 a dollar, unchanged against its previous close. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Rati Chaphekar and Pratiksha)

India Rupee - Asia FX: Most dn as Asian equities fall; Thai baht 0.3% lower

MUMBAI – Most Asian currencies fell against the dollar Wednesday due to losses in Asian equities following a decline on Wall Street Tuesday. The US market fell after comments by Federal Reserve Chair Jerome Powell regarding the future path of interest rates and economic data stoked concerns about slowing growth.

In his speech, Powell struck a cautious tone on further easing, saying the central bank needs to continue balancing the competing risks of high inflation and a faltering job market in coming policy decisions. Further, the S&P Global's flash US Composite PMI Output Index showed signs of an economic slowdown in the US. At 0930 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.35 against 97.22 Tuesday and 97.30 Monday.

The South Korean won fell 0.1% against the greenback. At 0930 IST, South Korea's Kospi was down a little over 1%. The Taiwan dollar fell 0.1% against the dollar even as data on Tuesday showed the country's export orders soared nearly 20% in August, mainly driven by demand for tech products such as those related to artificial intelligence. The export growth surpassed analysts' estimate of 13% growth.

The Chinese yuan fell 0.1% against the greenback. At 0930 IST, China's Shenzhen Composite was down 1%. The Thai baht fell the most among its Asian peers, down 0.3% against the dollar. A senior official from the Bank of Thailand Tuesday said the central bank wants to avoid unintended consequences from any measures such as imposing a potential tax on gold trading to curb the baht's strength. The Thai baht rose to a four-year-high against the dollar earlier. A stronger bhat poses a threat to Thailand's exports and tourism, key drivers of the country's economy.

The Indonesian rupiah traded steady against the greenback. Indonesia's parliament Tuesday approved President Prabowo Subianto's 2026 budget, which includes increased spending by $231.5 billion and a fiscal deficit of 2.68%, as the President aims to take the country's growth rate to 8%. The Philippine peso fell 0.3% against the dollar while the Malaysian ringgit traded steady. (Rati Chaphekar)

India Rupee: Rises slightly as RBI intervenes in spot, NDF via dollar sales

MUMBAI – The rupee rose slightly against the dollar Wednesday as the Reserve Bank of India likely sold dollars through public sector banks in the domestic spot and offshore non-deliverable forwards markets, dealers said. Just 10 minutes before the domestic spot market opened, the rupee was trading at around 88.90 a dollar in the offshore NDF market. However, the Indian currency opened flat against the dollar, all thanks to the RBI, they said. 

"They (RBI) sold in offshore to protect 89 from happening. I think we will see that protection continuing through the day. The intent seems to be there," a dealer at a private sector bank said. Dealers said that the central bank likely sold dollars around 88.77 in the spot market as well, which prevented the Indian currency from falling to a lifetime low. 

The rupee has come under downward pressure against the dollar, hitting a lifetime low of 88.7975 on Tuesday, as investors' risk appetite has taken a hit due to uncertainty about the India-US trade deal and a hefty hike in the fee for new H-1B visas by the US, dealers said. The US has imposed a $100,000 fee for new H-1B visas, mandatory for companies that want to hire workers under the H-1B visa programme.

A fall in other Asian currencies also led to downward pressure on the domestic currency, dealers said. Asian currencies fell 0.1-0.3% against the dollar, with the Thai baht being the worst hit. 

Dealers expect importers to step in to buy dollars during the day, fearing further depreciation in the Indian unit, weighing on the local unit. During the day, the rupee is seen moving in a range of 88.50 and 88.90 against the greenback. Dealers peg immediate technical resistance for the rupee at 88.60 a dollar, and support at 88.90. (Rati Chaphekar)

India Rupee: Expected range for rupee - Sept 24

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: 

(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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