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Informist, Wednesday, May 13, 2026

 

By Pratiksha

 

NEW DELHI – The rupee took no comfort from the government's decision to hike import duty on gold and silver and settled at a record closing low against the dollar for the third consecutive day due to persistent dollar purchases by banks on behalf of importers and higher crude oil prices, dealers said. However, the Reserve Bank of India's active intervention through dollar sales ensured losses for the Indian unit were limited, they said. 

 

"Government is trying to hit the demand problem while the issue is on the supply side. We need dollar supply in the market, which is not there at all," a dealer at a foreign bank said. "This is why the rupee did not react to the import duty hike news at all."

 

After hitting a high of 95.5100 a dollar in early trade, the rupee settled at 95.7050 on Wednesday, as against 95.6275 on Tuesday. The Indian unit fell to a record low of 95.8000 a dollar in the last leg of trade. 

 

The rupee rose slightly in early trade, taking some comfort from the government's decision late Tuesday to hike import duty on gold and silver to 15% from 6%. However, the impact was short-lived as the Indian unit gave up these gains shortly afterwards. 

 

Dealers said, noting relatively lower dollar-rupee levels, banks stepped in to buy dollars on behalf of importers, fearing the rupee might depreciate further. Oil marketing companies also actively bought the greenback, they said. 

 

"The import duty hike doesn't change the overall trajectory of the rupee," a dealer at a private-sector bank said. "Oil is still the bigger worry and will continue to dictate the rupee."

 

Brent crude price eased slightly but remained above the $107-per-barrel mark amid the fragile West Asia ceasefire. Crude futures rose by over 3% on Tuesday, extending earlier gains as hopes for a lasting US-Iran ceasefire faded, dimming prospects of reopening the Strait of Hormuz. Brent crude oil futures for July delivery were at $107.44 a barrel at 1530 IST, tad down from $107.77 a barrel Tuesday, but up from $104.21 a barrel Monday.

 

Further, the dollar index rose after a higher-than-expected US inflation data for April, which also weighed on the Indian unit. US consumer price inflation rose to 3.8% on an annual basis in April, marking the largest annual increase in nearly three years and raising expectations that the Federal Reserve would keep interest rates steady for a while. At 1530 IST, the dollar index was at 98.48 against 98.29 Tuesday and 97.91 Monday. 

 

The RBI intervened in the spot market at multiple dollar-rupee levels during the day, according to dealers. "RBI came in the market at 95.70 for some time and then it let the (dollar-rupee) levels go up," a dealer at a state-owned bank said. "After that, they protected 95.80." If not for the central bank's frequent interventions, the rupee may have fallen past the psychologically-crucial 96.00 mark, dealers said. 

 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.7050	95.6100	95.5100	95.8000	95.6275
1-year dlr/rupee fwd (paise)	312.07	314.92	316.63	308.78	310.93

 

FORWARDS

The one-year dollar-rupee forward premium rose for the fourth consecutive day as banks bought dollars for forward delivery on behalf of importers, on the expectation that the rupee may fall more, dealers said. If the rupee continues to depreciate, market participants expect forward premiums to rise further. 

 

However, gains were limited as some banks sold dollars for forward delivery, noting the relatively higher levels, dealers said. The one-year forward premium has jumped almost 20 basis points this week. 

 

The rise in the 10-year US Treasury yield had little impact on the premiums, dealers said. US Treasury yields rose to 4.46% Tuesday from 4.42% Monday after higher-than-expected inflation data.

 

On an absolute basis, the premium was 312.07 paise, up against 310.93 paise Tuesday. However, as a percentage, the one-year exact-period dollar-rupee forward premium was at 3.24% at 1530 IST, compared with 3.25% Tuessday. 

 

OUTLOOK

The rupee will continue to take cues from movement in crude oil prices Thursday as the war in West Asia and the peace negotiations between the US and Iran continue to evolve, dealers said. If crude prices rise to close to $110 per barrel, market participants expect the rupee to fall below the psychologically crucial 96.00 mark. 

 

The local unit will also take cues from movements in the dollar index. Market participants expect importers, particularly oil marketing companies, to continue buying dollars, fearing rupee depreciation amid uncertainty over the situation in West Asia.

 

Continued FPI outflows from Indian markets are also expected to pressure the Indian unit. FPIs have net sold Indian securities worth almost $22 billion since the start of the war in West Asia. 

 

While most dealers expect the RBI to continue selling dollars to support the rupee, they don't expect the central bank to intervene aggressively. Market participants will also look for measures by the central bank to spur foreign inflows into India and support the rupee.

 

"Despite intermittent recovery attempts, sentiment remains cautious as the rupee continues to trade under pressure near lifetime weak zones," said Jateen Trivedi, VP Research Analyst - commodity and currency at LKP Securities. "Near-term rupee range is seen between 95.45–96.00."

 

Dealers now see immediate technical support at 95.80 per dollar, a break of which may drag the Indian unit to 96.00. The rupee is likely to move in a range of 95.50-96.00 against the dollar Thursday. 

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India Rupee - World FX: Dollar index rises on stronger US inflation data

 

	AT 1507 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3510	1.3551	1.3510	1.3533
EUR/USD	1.1699	1.1742	1.1696	1.1738
NZD/USD	0.5924	0.5966	0.5923	0.5937
AUD/USD	0.7237	0.7248	0.7231	0.7238
USD/JPY	157.8850	157.8890	157.5500	157.5050
USD/CAD	1.3705	1.3710	1.3685	1.3696
EUR/JPY	184.7060	185.1550	184.6330	184.8850
CHF/USD	1.2771	1.2819	1.2771	1.2803
EUR/CHF	0.9157	0.9165	0.9151	0.9163

 

MUMBAI – The dollar index rose on Wednesday owing to higher-than-expected US inflation data and growing uncertainty around negotiations between the US and Iran to end the West Asia war. The US CPI rose 3.8% on year in April, beating expectations of 3.7%. Inflation was largely driven by high oil and grocery prices, with rising energy prices accounting for 40% of April's inflation gain.

 

The dollar index was at 98.53 on Wednesday against 98.29 Tuesday and 97.91 Monday. As investors' risk sentiment weakens, the demand for the dollar increases due to its safe-haven status. 

 

The British pound rose against the dollar as it became increasingly clear that the UK Prime Minister Keir Starmer did not intend to resign. Around 100 members of parliament from the Labour Party sought his resignation after the party took a beating in the recent local elections. The push to remove him lost momentum as the bar to remove remains high. The pound was marginally up against the dollar.

 

The euro was down as strong US inflation data and the dwindling hope of the US and Iran reaching a ceasefire agreement quickly weighed on the currency. The Japanese yen fell against the dollar, down 0.1%, as expectations grow that the US Federal Reserve could hike interest rates at least once this year. Hawkish Fed bets have increased following the release of the US CPI data, which showed that inflationary pressure is on the march, with higher than expected inflation levels.

 

The Canadian dollar was down 0.1% against the dollar. (Suryash Kumar)

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India Rupee: 1-yr fwd premium rises for 4th day as importers buy fwd dollars

 

	AT 1315 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.7100	95.6100	95.5100	95.7400	95.6275
1-year dlr/rupee fwd (paise)	312.07	314.92	316.63	308.78	310.93

 

MUMBAI – The one-year dollar-rupee forward premium rose marginally, continuing its gaining streak for the fourth consecutive day, as banks bought dollars for forward delivery on behalf of importers, on expectation the rupee may fall more, dealers said. The rupee touched its lifetime low of 95.7400 a dollar on Wednesday.  

 

If the rupee continues to depreciate, market participants expect forward premiums to rise further. "The dollar-rupee forward premium will rise sharply as panic buying plays out in the market," a dealer at a private-sector bank said.

 

However, gains for the premiums were limited as some banks sold dollars for forward delivery, noting the relatively higher levels, dealers said. The one-year forward premium has jumped almost 20 basis points this week. "Today (Wednesday) the market has both supply and demand, which is preventing any sharp movement of premiums in the forward market," a dealer at a state-owned bank said.

 

A rise in the 10 year US treasury yield had little impact on the premiums, dealers said. US Treasury yields rose Tuesday after a higher-than-expected inflation data underscored the growing economic ‌toll of the West Asia conflict. The 10 year US treasury yield rose to 4.46% Tuesday from 4.42% Monday. "If the US Treasury yield moves beyond 4.5%, then it may impact the one-year forward premium," a dealer at a state-owned bank said. 

 

The one-year exact period dollar-rupee forward premium was 3.27% at 1315 IST, a tad up from Tuesday's close of 3.25%. On an absolute basis, the premium was 312.07 paise, against 310.93 paise Tuesday.  (Suryash Kumar)

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India Rupee: Falls as importers buy dlrs; RBI's dlr sales prevent record low

 

	AT 1158IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.6825	95.6100	95.5100	95.7025	95.6275

 

MUMBAI –  The rupee erased early gains and fell against the dollar Wednesday, nearing its record low, owing to high crude oil prices and demand for dollars by importers, dealers said. Crude oil prices remain high as lasting peace evades West Asia, with the US and Iran still trying to iron out differences. Brent crude oil for delivery in July traded at $106.19 per barrel at 1158 IST.

 

However, the Reserve Bank of India stepped in through dollar sales, which prevented the Indian unit from hitting its record low of 95.7400, they said. The central bank likely intervened around 95.70 a dollar, dealers said. However, "the intervention isn't aggressive," a dealer at a private-sector bank said. 

 

The Indian unit rose earlier in the day on the back of the government's decision to impose a 10?sic customs duty and a 5% agriculture infrastructure and development cess on gold and silver imports, taking the effective import tax to 15% from 6%. 

 

However, noting the relatively lower dollar-rupee levels, banks stepped in to buy dollars on behalf of importers, fearing the rupee might depreciate further, dealers said. "The rupee will go down against the dollar as measures announced by the government to support the rupee will have a temporary effect. Whatever appreciation of rupee happened in the early trading hours was overcome by demand for dollars by importers, buying on dips (in dollar-rupee)," a dealer at a private-sector bank said.

 

For the rest of the day, the rupee is seen moving in a range of 95.40-95.80 a dollar. Dealers see strong technical support for the rupee at 95.80. (Suryash Kumar)

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India Rupee: Technical levels for rupee - May 13

 

MUMBAI – At 1105 IST, the rupee was at 95.5800 a dollar. At 0900 IST, the rupee was at 95.6100 a dollar, against the previous close of 95.6275. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerage

 

Participants	S2	S1	R1	R2
Private-sector bank	95.85	95.73	95.48	95.35
Private-sector bank	96.00	95.90	95.30	95.25
Private-sector bank	-	95.70	95.20	-
Foreign bank	95.95	95.75	95.40	95.20
Brokerage firm	95.80	95.70	94.80	94.50
Brokerage firm	96.00	95.80	94.80	94.35

 

(Pratiksha and Suryash Kumar)

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India Rupee: Erases early gains; custom duty hike on gold gives limited help

 

	AT 0940 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.6200	95.6100	95.5100	95.6300	95.6275

 

India Rupee: Erases early gains; custom duty hike on gold gives limited help

 

MUMBAI – The rupee erased all its early gains against the dollar as banks bought dollars on behalf of importers, noting the relatively lower dollar-rupee levels, dealers said. The Indian unit rose to a high of 95.5100 a dollar, shortly after opening, following the government's move to hike import duty on gold and silver, they said. 

 

The government has imposed a 10?sic customs duty and a 5% agriculture infrastructure and development cess on gold and silver imports, taking the effective import tax to 15% from 6%. However, market participants are sceptical on whether this decision will have a long-term positive impact on the rupee. 

 

"The fundamental factors point towards depreciation of the rupee. The government can't stop gold imports so it has taken this measure to ease some downward pressure on the rupee," a dealer at a private-sector bank said. Some dealers also said that by hiking the import duty, the government has increased the possibility of gold smuggling as people will find a way to evade the increased customs duty. 

 

However, high Brent crude prices amid a fragile ceasefire in the war in West Asia continues to weigh on the Indian unit, dealers said. Brent crude oil prices remained high at $106.62 per barrel at 0936 IST even though they eased a bit from the previous day's close. A fall in domestic equities also weighed on the local unit, they said. 

 

For the rest of the day, the rupee is seen moving in a range of 95.40-95.80 a dollar. Dealers see strong technical support for the rupee at 95.80 a dollar. (Suryash Kumar)

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India Rupee: Expected range for rupee - May 13

 

NEW DELHI – Following are the support and resistance levels expected for the rupee Wednesday, as forecast by leading banks and brokerages in an Informist Poll:

 

PARTICIPANT	SUPPORT	RESISTANCE
Public-sector bank	95.80	95.30
Public-sector bank	95.70	95.40
Private-sector bank	95.70	95.20
Foreign bank	95.80	95.00
Brokerage firm	95.75	95.25
Brokerage firm	95.75	95.25

 

 

 

 

 

 

 

 

 

 

(Pratiksha )

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India Rupee - Asia FX: Mixed as investors assess US CPI data; yuan rises

 

MUMBAI – Asian currencies traded on a mixed note against the dollar Wednesday as investors assesed a higher-than-expected US inflation data amid uncertainty over peace negotiations between the US and Iran. 

 

The US CPI rose 3.8% on-year in April, beating expectations of 3.7%. Inflation was largely driven by high oil and grocery prices, with rising energy prices accounting for 40% of April's inflation gain. 

 

Meanwhile, Brent crude price eased slightly in early trading but remained above the $107 per barrel level amid uncertainty surrounding the peace negotiations between the US and Iran. Brent crude oil futures for July delivery were at $107.01 a barrel at 0830 IST, a tad down from $107.77 a barrel Tuesday. 

 

The South Korean won was down 0.3% against the dollar while the Indonesian rupiah and Philippine peso were down 0.1%. High crude prices amid escalating tensions between the US and Iran have weighed on the oil-sensitive currencies.

 

Meanwhile, the Malaysian ringgit, Thai baht, and the Chinese Yuan were up against the dollar. The ringgit was up 0.1% against the dollar. The Thai baht was up 0.2% against the dollar while the Chinese yuan was also up 0.1%.

 

The yuan rose ahead of a meeting between US President Donald Trump and Chinese President Xi Jinping. Trump is expected to discuss the West Asia war with Xi Jinping during meetings from Thursday to Friday and is likely to urge China to convince Tehran to make a deal with Washington to end the conflict, reports said. (Suryash Kumar)

End

 

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

 

Edited by Saji George Titus

 

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