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Informist, Thursday, Oct. 30, 2025

By Pratiksha

NEW DELHI – The rupee ended sharply lower against the dollar, logging its biggest single day fall in over two months, Thursday due to a rise in the dollar index and persistent dollar purchases on behalf of importers, dealers said. While the Reserve Bank of India stepped in to support the Indian currency, the intervention was not very aggressive in nature, they said.  

"RBI allowed the rupee to fall after a point. There was lot of buying (of dollars)," a dealer at a state-owned bank said. "After today, the rupee's depreciation bias may persist."

The rupee settled at an over two-week low of 88.6950 a dollar, down 0.6% from the previous close of 88.1950 a dollar. Other Asian currencies fell 0.1-0.5% against the dollar, with the Indian unit emerging as the worst performer.

The Indian currency started the day sharply lower against the dollar as the dollar index rose overnight after US Federal Reserve Chair Jerome Powell's comments pushed back against expectations of another rate cut at the US central bank's December meeting. "In the committee's discussions at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it," Powell said.

His comments came after the Fed Wednesday cut the benchmark federal funds rate by 25 basis points for the second consecutive meeting, to 3.75-4.00%. At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 99.17, up from 99.14 Wednesday and 98.73 Tuesday. 

Shortly after market opening, banks rushed to buy dollars on behalf of importers, who feared a further depreciation in the rupee, which also weighed on the local unit, dealers said. "Importers who had expected rupee to go back to above 88 (a dollar) levels returned to the market today," a dealer at a private-sector bank said. "Some sort of panic buying (of dollars) may have happened."

State-owned banks stepped in to sell dollars, likely on behalf of the RBI around the key technical support of 88.50, which limited losses for the Indian unit, dealers said. However, as importers stepped up their dollar purchases and some banks bought dollars ahead of daily reference rate fixing, the Indian currency fell past the key level, leading to stop losses being triggered on short dollar bets, and leading to the Indian unit hitting the day's low of 88.7425, dealers said.   

Some importers also bought the greenback to meet their month-end payment requirements, dealers said. The Indian unit may have also came under further downward pressure owing to expiry of the RBI's month-end non-deliverable forwards contracts, they said. "There was in general a lot of demand (for dollars) in the market due to month-end," a dealer at a state-owned bank said. "RBI's NDF positions are also due for maturing."

While the central bank stepped in to prevent the Indian unit from notching further losses, its intervention after the breaching of the 88.50 level, was not very aggressive in nature, according to dealers. "RBI was there in the market but not to directionally change the course of rupee," a dealer at another state-owned bank said.

Some dealers said the apex bank may have sold around $1.0 billion-$1.5 billion in the spot market Thursday, to support the rupee. 

A fall in domestic equities also weighed on the local unit, dealers said. On Thursday, both the Sensex and Nifty 50 ended 0.7% lower each. 

FORWARDS

The one-year dollar-rupee forward premium ended at an over two-week low as US Treasury yields rose sharply after Fed Powell dampened expectations for another interest rate cut by the central bank in December, dealers said. The 10-year US bond yield jumped to 4.08% Wednesday from 3.99% Tuesday. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

Fed funds futures traders are now pricing in a 68% chance of the Fed cutting interest rates by 25 bps in December, down from around 91% before the US FOMC's policy decision Wednesday, the CME FedWatch tool showed. 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.22%, against the previous close of 2.25%. On an absolute basis, the premium was 195.63 paise, against 199.75 paise Wednesday. 

OUTLOOK

On Friday, the rupee will take cues from movement in the dollar index and other Asian currencies, dealers said. Traders expect the Reserve Bank of India to continue intervening through dollar sales to prevent the Indian unit from falling sharply. 

"I would expect exporters to sell (dollars) more near to 88.80 levels and then wait if RBI permits rupee to cross 88.80," said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "Markets are still keeping a watch on the trade deal which is still under wraps." 

Market participants will also watch out for any development on the India-US trade deal negotiations. "If US trade deal happens in our favour, then spot rupee will break 88.00 levels and will appreciate," a dealer at a brokerage firm said. 
 

Dealers also expect importers to continue buying dollars, wary of further depreciation in the rupee, which would exert pressure on the local unit. Further, the Indian unit may also come under downward pressure owing to expiry of the RBI's NDF contracts, they said. 

The rupee is expected to move in a range of 88.30 to 88.80 against the dollar Friday. Immediate technical support for the rupee is pegged at 88.80 per dollar. 

India Rupee - World FX: Yen slumps after BoJ rate decision; dollar index up

MUMBAI – The Japanese yen fell 0.7% against the US dollar after Bank of Japan kept interest rates steady at 0.5% Thursday, but gave little cues on when it could next raise rates. The central bank repeated its pledge to continue increasing borrowing costs if the economy moves in line with its projections. Board members Naoki Tamura and Hajime Takata dissented to the decision of keeping rates unchanged, repeating their proposals made in September to raise rates to 0.75%.

Bank of Japan Governor Kazuo Ueda's comments at a post-meeting press conference also offered little detail on the central bank's next rate action. "As for the timing and viability of rate hikes, we don't have any preset idea," he said.

The dollar index rose after US Federal Reserve Chair Jerome Powell said another rate cut at the Fed's December meeting was not a foregone conclusion. "In the committee's discussions at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it," Powell said.

His comments came after the Fed Wednesday cut the benchmark federal funds rate by 25 basis points for the second consecutive meeting, to 3.75-4.00%. At 1440 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.17, up from 99.14 Wednesday and 98.73 Tuesday.

The euro rose 0.2% against the dollar after data released Thursday showed France's economy grew 0.5% in the third quarter, faster than forecast. Economists polled by Reuters had forecast a growth of 0.2%. The pound sterling was steady against the greenback.

The Australian dollar rose 0.1% against the greenback after US President Donald Trump Thursday said he had agreed with President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming US soybean purchases, and keeping rare earths exports flowing.

Trump said tariffs on Chinese imports would be cut to 47% from 57% by halving the rate of tariffs related to trade in fentanyl precursor drugs to 10%. Any development in China's economy affects Australia due to their strong bilateral ties. The New Zealand dollar was up 0.2% against the dollar.  (Rati Chaphekar)

India Rupee: Falls more as importers persistently buy dlrs, stop-losses hit

MUMBAI – The rupee fell further against the dollar as banks persistently bought dollars on behalf of importers, who were wary of further depreciation in the Indian unit, dealers said. A rise in the dollar index also weighed on the local currency, they said. The rupee hit a low of 88.6650 a dollar, its lowest level in over two weeks.  

The dollar index rose after Federal Reserve Chair Jerome Powell Wednesday dampened expectations for another interest rate cut by the central bank in December. The Fed Wednesday cut the benchmark federal funds rate by 25 basis points for the second consecutive meeting, to 3.75-4.00%. 

Importers' persistent purchases of the greenback led to stop-losses being triggered on short dollar bets around the key technical support level of 88.50 a dollar, which further exacerbated the rupee's fall, dealers said.  

Meanwhile, some state-owned banks stepped in to sell dollars, likely on behalf of the Reserve Bank of India, at multiple levels, which limited losses for the Indian unit. However, the selling was less aggressive in nature after the rupee fell past the 88.50 level, according to some dealers. "We are seeing aggressive selling (of dollars from RBI) since morning," a dealer at a private sector bank said. "However, selling was less aggressive after rupee crossed 88.50 (a dollar)."

For the rest of the day, the rupee is seen moving in a range of 88.20 and 88.80 against the greenback. Dealers peg immediate technical support for the rupee at 88.70. (Rati Chaphekar)

India Rupee: Technical levels for rupee - Oct 30

MUMBAI – At 1220 IST, the rupee was at 88.5700 per dollar. At 0900 IST, the rupee was at 88.3800 a dollar, against the previous close of 88.1950 a dollar. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Rati Chaphekar)

India Rupee: Premium at 3-wk low; Powell's remarks reduce Dec rate cut odds

NEW DELHI – The one-year dollar-rupee forward premium fell to a three-week low as US Treasury yields rose sharply after Federal Reserve Chair Jerome Powell dampened expectations for another interest rate cut by the central bank in December, dealers said. "In the committee's discussions at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it," Powell said.

His comments came after the Fed Wednesday cut the benchmark federal funds rate by 25 basis points for the second consecutive meeting, to 3.75-4.00%. The 10-year US bond yield jumped to 4.08% Wednesday from 3.99% Tuesday. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

Fed funds futures traders are now pricing in a 67% chance of the Fed cutting interest rates by 25 bps in December, down from around 91% before the US FOMC's policy decision Wednesday, the CME FedWatch tool showed. "December rate cut (by the Fed) was somewhat in picture before (but) now there is uncertainty," a dealer at a private sector bank said. "Added to that, if RBI continues to receive in forwards, we will see (a) further downward move in levels."

In recent times, the RBI has been selling dollars, mostly for long-tenure forward delivery, in order to neutralise its spot interventions and avoid draining rupee liquidity, dealers said. This has weighed on forward premiums.

At 1115 IST, the one-year exact period dollar/rupee forward premium was 2.21%, against the previous close of 2.25%. On an absolute basis, the premium was 195.77 paise, against 199.75 paise Wednesday. (Pratiksha)

India Rupee - Asia FX: Most down as dlr index rises after Powell's comments

MUMBAI – Most Asian currencies fell against the dollar Thursday as the dollar index rose sharply after Federal Reserve Chair Jerome Powell turned his back towards another rate cut at the central bank's December meeting, defying market expectations. On Wednesday, the Fed cut the benchmark target federal funds rate by 25 basis points, as expected. Market participants had, however, firmed up expectations of another rate cut in December. 

Powell said central bank officials are struggling to reach a consensus about what lies ahead for the monetary policy and that financial markets should not assume another interest rate cut will happen at the end of the year.

Fed funds futures traders are now pricing in a 67% chance of the Fed cutting interest rates by 25 bps in December, down from around 91% Wednesday before the US FOMC's meeting, the CME FedWatch tool showed. At 1020 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.08, down from 99.14 Wednesday but up from 98.73 Tuesday. 

Tracking the sharp rise in the dollar index, both the Philippine peso and Malaysian ringgit fell 0.2% against the greenback, while the Indonesian rupiah fell 0.1%.

The South Korean won fell 0.1% against the greenback even after US President Donald Trump and South Korean President Lee Jae Myung finalised details of their fraught trade deal at a summit in South Korea Wednesday. The allies unveiled a deal in late July under which Seoul would avoid the worst of US tariffs on its imports by agreeing to pump $350 billion of new investments into the US in return for lower tariff rates.

The Thai baht fell 0.2% against the dollar even after Thailand's Finance Minister Ekniti Nitithanprapas late Wednesday said the country has not engaged in currency manipulation, adding that the central bank has the tools to manage the currency without resorting to intervention. Nitithanprapas also told reporters that the government would put illicit fund movements under more scrutiny by December. "We have not distorted the management of the baht in the past as it is something our central bank has been very cautious about," he said.

The Taiwan dollar fell 0.3% against the dollar. Bucking the trend, the Chinese yuan traded steady against the greenback. Trump held talks with China's Xi Jinping in South Korea Thursday, with both leaders sounding optimistic about cooling trade tensions between the world's two largest economies. However, neither side has released any further details of the talks.  (Rati Chaphekar)

India Rupee: Slumps as dollar up after Powell's comments; RBI action eyed

MUMBAI – The rupee fell sharply against the dollar Thursday as banks bought dollars on behalf of importers who feared a further fall in the Indian unit, dealers said. The rupee came under pressure as the dollar index rose after Federal Reserve Chair Jerome Powell said another cut in the Fed's benchmark target rate in December was not a given, rather, far from it, they said. 

"The rupee was supposed to appreciate after a rate cut by the Federal Reserve," a dealer at a state-owned bank said. "But Powell's hawkish comments have overridden the rate-cut impact."

Powell said a rate cut at the Fed's December meeting was not a foregone conclusion. He highlighted that it was difficult for the Federal Reserve to take any further steps on rates due to lack of federal government data, which is no longer available due to the ongoing US government shutdown.

Some dealers also suspected that some state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, at 88.40 a dollar, which prevented the rupee from a further depreciation early in the day. The rupee opened 20 paise down over Wednesday.  

For the rest of the day, the rupee is seen moving in a range of 88.20 and 88.80 against the greenback. Dealers peg immediate technical support for the rupee at 88.70. (Rati Chaphekar)

India Rupee: Expected range for rupee - Oct 30

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: 

(Rati Chaphekar)

End

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

Edited by Akul Nishant Akhoury

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