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Informist, Monday, Sept. 29, 2025

 

By Rati Chaphekar and Pratiksha

 

MUMBAI – The rupee ended at a record closing low against the dollar as banks continuously bought dollars on behalf of importers and foreign portfolio investors, dealers said. However, the losses were capped as the Reserve Bank of India kept its stranglehold on the Indian currency intact throughout the day, they said. 

 

"Over the year, we have seen the RBI protect one particular level of rupee. This time it seems to be around 88.75 (a dollar)," a dealer at a private-sector bank said. "It is possible that this level may break after the MPC (Monetary Policy Committee) meeting."

 

After trading in a tight range of just 11 paise during the day, the domestic currency ended at 88.7600 a dollar, against its previous close of 88.7175. Other Asian currencies, however, rose 0.1-0.6% against the greenback due to a fall in the dollar index. The Indian unit was the worst performer in the emerging market pack. 

 

The Indian unit opened slightly higher against the dollar due to a fall in the dollar index amid concern over a potential US government shutdown and as the personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge, came in line with expectations.

 

Data Friday showed the US personal consumption expenditures price index increased 0.3% in August after gaining 0.2% in July. In the 12 months through August, the so-called core PCE inflation index increased by 2.9%, following a 2.9% rise in July. The Fed tracks the PCE price measures for its 2% inflation target. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.98, against 98.18 Friday and 98.45 Thursday. 

 

However, the Indian unit erased all of its opening gains shortly afterwards as banks persistently bought dollars on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said. Moreover, oil marketing companies bought dollars to meet their month-end and quarter-end payment needs, which also weighed on the local unit, dealers said. "The market was just biddish (on dollar buying) all along. Importers were there at dips (in dollar/rupee). There were quarter-end mismatches being filled too," a dealer at a state-owned bank said. 

 

The domestic unit was initially also supported by dollar selling from exporters, who expected the RBI to intervene around 88.70-88.75 levels, as was the case last week. As expected, the central bank intervened by selling dollars to prevent the domestic unit from hitting a record low. The rupee hit a lifetime low of 88.7975 last week.

 

The Indian unit touched a low of 88.7700 during the day, within spitting distance of its lifetime low. The central bank has intervened at similar levels throughout last week. "The market traded at the same levels as the last few sessions. Nats (nationalised banks) were there on offer (for dollars) and the rupee kept trading at the same levels," a dealer at another private-sector bank said.  

 

The rupee also came under downward pressure as banks bought dollars for FPIs, who wanted to pull out funds from domestic equities, dealers said. Indian equities have been experiencing FPI outflows this month as investors' risk appetite has taken a hit amid uncertainty over the India-US trade deal and US tariffs. 

 

Meanwhile, rating agency Moody's affirmed India's long-term local and foreign currency issuer ratings and the local-currency senior unsecured rating at 'Baa3'. The agency also maintained its stable outlook for the economy. However, the Indian unit did not take any cues from this development.

 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.7600	88.6600	88.6600	88.7700	88.7175
1-year dlr/rupee fwd (paise)	205.59	206.07	207.13	205.29	206.50

 

FORWARDS

The one-year dollar/rupee forward premium ended largely steady on Monday as traders avoided placing fresh bets ahead of the decision of the RBI's Monetary Policy Committee on Wednesday, dealers said. The MPC's three-day meeting kicks off Monday. Forwards of a currency pair reflect the interest rate differential between the two countries. 

 

Market participants expect the tone and commentary of RBI Governor Sanjay Malhotra on Wednesday to hint at the possibility of a 25-basis-point rate cut at the panel's meeting in December. Some traders are also positioning for a 25-bps rate cut Wednesday, which weighed on the forward premiums, dealers said.

 

According to a poll by Informist, the majority of economists said the rate-setting panel is likely to keep interest rates on hold for the second consecutive meeting on Wednesday. However, four of the 15 economists polled said they expected a 25-bps rate cut. 

 

Meanwhile, US Treasury yields edged slightly higher on Friday owing to a slew of strong economic data in the US last week, which weighed on the forward premiums, dealers said. Market participants now await multiple economic data points in the US this week for more cues on the Fed's rate cut trajectory. Apart from Friday's key jobs report, the US job openings, private payrolls and the manufacturing purchasing managers' index are due to be released this week.

 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.32%, against the previous close of 2.33%. On an absolute basis, the premium was 205.59 paise, against 206.50 paise Friday. 

 

OUTLOOK

On Tuesday, the rupee will take cues from movement in the dollar index after speeches by multiple Federal Reserve officials later in the day, dealers said. Market participants will continue to closely monitor developments related to India-US trade talks and US tariffs. They expect weak risk appetite among investors, amid uncertainty over US tariffs, to continue weighing on the rupee.

 

"Prolonged delays in the US–India trade deal and the existing 50% tariffs continue to hurt export sentiment. The rupee is expected to remain under a weak bias, with the range seen between 88.55–89.25," Jateen Trivedi, VP research analyst – commodity and currency at LKP Securities, said in a note.

 

Market participants expect importers to continue buying dollars, wary of a further decline in the rupee, which would exert downward pressure on the local unit. However, noting the central bank's relentless intervention in recent times, dealers expect the central bank to continue intervening through dollar sales and prevent the rupee from inching closer to the psychologically crucial level of 89.00 a dollar.

 

"If the RBI leaves the rupee, there will be a knee-jerk reaction for sure. It has been holding the rupee for some time now," a dealer at a foreign bank said. The rupee is expected to move within a range of 88.50 to 88.90 against the dollar, with immediate technical support for the rupee pegged at 88.80 per dollar. 

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India Rupee - World FX:Yen up as BoJ official's comments fuel rate hike bets

 

	AT 1510 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3437	1.3451	1.3401	1.3395
EUR/USD	1.1711	1.1734	1.1703	1.1697
NZD/USD	0.5789	0.5796	0.5771	0.5772
AUD/USD	0.6565	0.6573	0.6542	0.6544
USD/JPY	148.5860	149.5110	148.4750	149.5660
USD/CAD	1.3921	1.3947	1.3916	1.3940
EUR/JPY	174.0120	175.1756	174.0150	174.9800
CHF/USD	1.2558	1.2577	1.2534	1.2533
EUR/CHF	0.9326	0.9341	0.9325	0.9334

 

India Rupee - World FX: Yen up as BoJ official's comments fuel rate hike bets

 

MUMBAI – The Japanese yen rose 0.6% against the dollar Monday after Bank of Japan board member Asahi Noguchi Monday said the need for an interest rate hike was increasing "more than ever". He said various economic indicators for Japan show steady progress on achieving the BoJ's 2% inflation target, with companies passing on rising costs more actively and signalling readiness to keep increasing wages. Noguchi's comments fuelled expectation of a rate hike by the central bank in October. The central bank kept rates steady at 0.5?rlier this month, as expected.

 

The dollar index fell amid concern over a potential government shutdown and as the US personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge, came in line with expectations. Data Friday showed the US personal consumption expenditures price index increased 0.3% in August after gaining 0.2% in July. In the 12 months through August, the so-called core PCE inflation index increased 2.9?ter rising 2.9% in July. The Fed tracks the PCE price measures for its 2% inflation target. At 1510 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.92, against 98.18 Friday and 98.45 Thursday. 

 

The Australian dollar rose 0.4% against the greenback ahead of the outcome of its policy meeting due Tuesday, where the central bank is expected to keep the key policy rate unchanged at 4%. The New Zealand dollar rose 0.3% against the greenback. 

 

The Swiss franc rose 0.2% against the greenback. Switzerland's central bank Monday said the Swiss national bank and the European central bank are exploring interlinking their instant payment services. It would allow for cross-currency instant payments, which are payments originating in one currency area, to be credited to an account in the other currency area within seconds, the central bank said. The euro rose 0.2% against the greenback, tracking a fall in the dollar index. 

 

The pound sterling rose 0.3% against the dollar even after the Bank of England Monetary Policy Committee member Swati Dhingra Friday said in a newspaper column the UK's high inflation rate is likely to ease off and the central bank should move more quickly to cut borrowing costs. The Bank had kept its policy rate unchanged at 4?rlier this month. (Rati Chaphekar)

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India Rupee: Forward premium steady on caution ahead of MPC decision Wed

 

	AT 1345 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.7500	88.6600	88.6600	88.7700	88.7175
1-year dlr/rupee fwd (paise)	205.59	206.07	207.13	205.59	206.50

 

MUMBAI – The one-year dollar/rupee forward premium was largely steady on Monday as traders exercised caution and refrained from placing fresh bets ahead of the decision of the Reserve Bank of India's Monetary Policy Committee on Wednesday, dealers said. The MPC's three-day meeting kicks off Monday. Forwards of a currency pair are reflective of the interest rate differential between the two countries. 

 

Market participants expect the tone and commentary of RBI Governor Sanjay Malhotra Wednesday to hint at scope for a 25-basis-point rate cut at the panel's meeting in December. Some traders are also positioning for a 25-bps rate cut Wednesday itself, which weighed on the forward premiums, dealers said.

 

"I will not position too much before the policy outcome. There is a bit of uncertainty there," a dealer at a private-sector bank said. "There are chances that we may see some dovish comments but there are also chances that the comments are just on the cautious side and not leaning to one side." 

 

In a poll by Informist, majority of the economists said the rate-setting panel is likely to keep interest rates on hold for the second consecutive meeting on Wednesday. However, four of the 15 economists polled said they expected a 25-bps rate cut. 

 

Meanwhile, US Treasury yields edged slightly higher on Friday owing to a slew of strong economic data in the US last week, which weighed on the forward premiums, dealers said. The US personal consumption expenditures index report for August was in line with expectations, while personal income and consumer spending surprised to the upside. The personal consumption expenditures price index rose by 0.3% last month, and by 2.7% year-over-year, hitting the consensus estimate. The PCE index is considered the Federal Reserve's preferred inflation measure. 

 

Market participants now await multiple economic data in the US this week for more cues on the Fed's rate cut cycle. Apart from Friday's key jobs report, the US job openings, private payrolls and the manufacturing purchasing managers' index are due to release this week.

 

At 1345 IST, the one-year exact period dollar/rupee forward premium was 2.32%, unchanged against the previous close. On an absolute basis, the premium was 205.59 paise, against 206.50 paise Friday.  (Pratiksha)

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India Rupee: In thin band; RBI dollar sales offset importers, FPIs' dlr buys

 

	AT 1235 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.7550	88.6650	88.6500	88.7550	88.7175

 

MUMBAI – The rupee traded in a narrow range against the dollar Monday as the Reserve Bank of India's likely intervention through dollar sales offset the impact of banks' dollar buys for oil importers and foreign portfolio investors, dealers said. The Indian unit has moved in a range of just 9 paise so far in the day.

 

The central bank likely intervened around 88.75 a dollar, just like the last week, which prevented the Indian unit from hitting a record low. The Indian unit had fallen to a record low of 88.7975 last week. "I think they (RBI) are trying to keep rupee stable before policy. There are chances we may see dovish comments from the (RBI) governor," a dealer at a private-sector bank said. "I am seeing the same rangebound move today. 88.80 will not break."

 

Banks bought dollars on behalf of oil marketing companies, who wanted to make the most of the relatively lower dollar/rupee levels, which weighed on the Indian unit. The rupee had risen to a high of 88.6600 a dollar earlier in the day. Moreover, some banks bought dollars for importers, who wanted to meet their month-end and quarter-end payment requirements, they said.

 

The Indian unit came under pressure as banks bought dollars for FPIs, who wanted to pull out the funds from domestic equities, dealers said.

 

A fall in the dollar index also supported the Indian unit after the US personal consumption expenditures price index, the US Federal Reserve's preferred inflation gauge, was in line with expectations, dealers said. At 1235 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.98, against 98.18 Friday and 98.45 Thursday.

 

For the rest of 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 88.80. (Rati Chaphekar)

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India Rupee: Technical levels for rupee - Sept 29

 

MUMBAI – At 1105 IST, the rupee was at 88.7375 per dollar. At 0900 IST, the rupee was at 88.6600 a dollar, against its previous close of 88.7175 a dollar. 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	89.20	89.00	88.20	87.80
Brokerage firm	89.20	88.90	88.20	87.80
Brokerage firm	88.80	88.73	88.55	88.50

 

(Rati Chaphekar)

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India Rupee: Erases early gains as oil cos buy dlrs; dlr index fall supports

 

	AT 0945 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.7150	88.6600	88.6600	88.7225	88.7175

 

MUMBAI – The rupee erased all early gains against the dollar Monday as banks stepped in to buy dollars on behalf of oil marketing companies, noting the relatively lower dollar/rupee levels, dealers said. The Indian unit opened 5 paise higher at 88.6600 a dollar. 

 

The rupee was supported by a fall in the dollar index and a rise in other Asian currencies after the US personal consumption expenditures price index, the US Federal Reserve's preferred inflation gauge, came in line with expectations, dealers said. Asian currencies rose 0.1-0.5% against the dollar, with the South Korean won gaining the most. At 0945 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.96, against 98.18 Friday and 98.45 Thursday. 

 

The Indian unit was also supported by banks' dollar sales on behalf of exporters, who expect the Reserve Bank of India to intervene around the current dollar/rupee levels, just like the past few trading days, they said. Most dealers expect the RBI to sell dollars in order to prevent the Indian unit from hitting a record low. The Indian currency hit a lifetime low of 88.7975 last week. 

 

"Both importers and exporters are booking profits as RBI might come in at any level now. They (RBI) intervened at similar levels last week," a dealer at a state-owned bank said. "It (the rupee) will be largely range bound between 88.60-88.80 today (Monday), but, if it crosses 88.80, it is likely to go to 89.00."

 

Most traders were cautious due to a possible US government shutdown on disagreement over budget allocations, dealers said. Market participants fear if the government shuts down partially, Friday's US employment report for September may not be released. The data is an important indicator of whether the US Federal Reserve will continue its rate-cut cycle next month.

 

For the rest of 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 88.80. (Rati Chaphekar)

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India Rupee - Asia FX: Rise as dollar index falls; South Korean won up 0.5%

 

MUMBAI – Asian currencies rose against the dollar Monday due to a fall in the dollar index after the US personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge, came in line with expectations. Investors also braced for a possible shutdown of the US government, which would in turn could delay publication of the September payrolls report and other key economic data this week. 

 

Data Friday showed the US personal consumption expenditures price index increased 0.3% on month in August after gaining 0.2% in July. In the 12 months through August, the so-called core PCE inflation index increased 2.9?ter rising 2.9% in July. The Fed tracks the PCE price measures for its 2% inflation target. At 0923 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.95, against 98.18 Friday and 98.45 Thursday. 

 

The Chinese yuan rose 0.2% against the greenback after data released Saturday showed China's industrial profits returned to growth in August by increasing 20.4% on year in August, reversing a 1.5% on-year decline in July. Profits grew 0.9% in the first eight months compared to a 1.7?cline in January-July. 

 

Moreover, China's central bank Friday said that it will step up monetary policy adjustments and strengthen coordination between monetary and fiscal policies to support economic growth amid a "complex and severe" external environment. The Taiwan dollar rose 0.4% against the dollar. 

 

The South Korean won rose 0.5% against the greenback, the most amongst its peers, after a spokesperson for President Lee Jae Myung Sunday said that the US has agreed that South Korea is not manipulating its currency for trade advantage. The two allies agreed that Seoul does not fall under the manipulator designation that the US Treasury Department announces in reports twice a year. 

 

The Indonesian rupiah rose 0.5% against the dollar. The country's Finance Minister Purbaya Yudhi Sadewa Friday said he did not order state banks to raise their US dollar deposit rate to 4%, and that the government was still considering what incentives to offer to bolster the domestic US dollar supply. He said he would not intervene in the operations of state banks, but he would "advise the banks to correct" their policy. Four Indonesian state banks announced that they will raise their US dollar deposit rates starting from Nov. 5.

 

The Philippine peso and the Thai baht rose 0.1% against the dollar each, while the Malaysian ringgit rose 0.3%. (Rati Chaphekar)

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India Rupee: Expected range for rupee - Sept 29

 

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	88.75	88.60
State-owned bank	88.85	88.45
Private-sector bank	88.80	88.45
Foreign bank	89.00	88.60
Brokerage firm	88.79	88.49
Brokerage firm	89.00	88.50
Brokerage firm	88.80	88.50
Brokerage firm	88.73	88.55

 

 

 

 

 

 

 

 

 

 

 

 

(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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