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Informist, Thursday, Jun. 18, 2026

By Divya Moolayattil

MUMBAI – The rupee is expected to fall Thursday as the dollar index crossed 100 for the first time since Mar. 31 after the US Federal Open Market Committee took a hawkish policy turn Wednesday, even as it held interest rates steady. Demand for the greenback rose sharply as Fed chair Kevin Warsh signalled the possibility of a rate hike this year to bring inflation back to 2%, a target the Fed has missed for five years, dealers said.  

The rupee is likely to open around 94.65-94.70 a dollar Thursday, after settling at 94.5250 Wednesday. The Indian unit is expected to move in a range of 94.50-94.90 against the dollar during the day. Dealers expect the rupee to touch 95.00 a dollar if it breaks 94.90 a dollar, which is a strong support level for the Indian unit. "Iran-US deal is old for the market now. It has lost its sheen. Market will focus on newer trends," a dealer at a private sector bank said. 

However, most dealers don't expect the rupee to slide to 96.00 a dollar as crude oil prices remain lower due to positive cues from West Asia. The US and Iranian presidents Wednesday signed an interim agreement to end the war and reopen the Strait of Hormuz, and said the deal is in effect immediately.

A US official disclosed the text of the deal, which included reopening of the Strait of Hormuz, outlining a $300-billon plan for Iran's reconstruction, at least a temporary lift on restrictions on Iran's oil exports, and permanent termination of military operations on all fronts, including Lebanon. But it pushed talks about Iran's nuclear programme, the key reason US-Israeli attacks began in February, into a 60-day negotiation period. 

Brent crude oil prices stayed below $80 a barrel Thursday. At 0715 IST, Brent crude oil for August delivery fell to $78.40 a barrel from $79.55 Wednesday. "Oil will give some support to the rupee in the middle of the Fed news," the dealer said. 

Dealers expect importers, mostly oil companies, to buy dollars Thursday, taking advantage of lower oil prices. In case the Indian unit inches closer to the crucial level of 95.00 a dollar, dealers expect the Reserve Bank of India to intervene through dollar sales, but not very aggressively, as has been the case recently. 

Dealers said the Indian currency may also find support from a slew of measures announced by the Reserve Bank of India to attract dollar inflows.

FORWARDS

The one-year dollar-rupee forward premium is expected to rise as banks may buy dollars for forward delivery, amid sharp demand for dollars after the US Fed took a hawkish stance, dealers said. Banks may buy dollars for forward delivery for oil importers as well, which may push premiums further up, they said. 

On an annualised basis, the premium on the one-year exact-period dollar-rupee forward contract is seen at 2.80-2.85% Thursday. On Wednesday, it settled at 2.77%. On an absolute basis, the premium ended at 263.29 paise. 

End

US$1 = INR 94.5250

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

Edited by Avishek Dutta

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