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Informist, Wednesday, Oct. 1, 2025

 

By Rati Chaphekar

 

MUMBAI – The rupee ended higher against the dollar Wednesday due to positive sentiment in the market after the Reserve Bank of India rolled out a series of foreign exchange measures, including steps to promote internationalisation of the Indian currency, at the outcome of its Monetary Policy Committee meeting. A sharp rise in domestic equities and a fall in the dollar index also boosted the Indian unit, they said. 

 

The rupee settled 0.1% higher at 88.6900 a dollar on Wednesday. It traded in a range of 15 paise throughout the day. Most other Asian currencies also rose 0.1-0.3% against the dollar, with the Thai baht being the best performer. 

 

The Indian unit traded at 88.8500 a dollar in the offshore non-deliverable forwards market shortly before the domestic spot market opened. However, it opened flat against the dollar in the spot market as the Reserve Bank of India is likely to have sold dollars in the offshore NDF market to prevent the rupee from hitting a fresh lifetime low. 

 

The rupee traded steady for the first hour of trade as market participants awaited the outcome of the RBI's Monetary Policy Committee meeting at 1000 IST. However, it rose to the day's high of 88.6475 after the central bank announced a series of foreign exchange measures, including steps to boost internationalisation of the Indian unit. 

 

The RBI proposed extending the time period for repatriation from accounts held by exporters in IFSC. It also announced relaxation of compliance requirements for small value exporters and importers. The central bank also proposed to increase the period for foreign exchange outlays from four months to six months, in the case of merchant trade transactions.

 

It also announced several measures to promote internationalisation of the rupee, including allowing banks to lend in rupees to businesses in neighboring countries and setting official reference exchange rates for major trading partners' currencies.

 

The RBI's Monetary Policy Committee left the policy repo rate unchanged at 5.50% and retained its 'neutral' policy stance, in line with market expectations. Domestic equities rose sharply on the back of gains in banking stocks after the RBI proposed a review of capital market exposure guidelines for banks, which also supported the rupee, dealers said. Both the benchmark indices – the Nifty 50 and the Sensex – closed 0.9% higher.

 

However, banks bought dollars for foreign portfolio investors, who wanted to pull out funds from domestic equities, which also weighed on the Indian unit. "Overall, the day was positive for the rupee, but some FPI outflows were seen," a dealer at a state-owned bank said. 

 

A fall in the dollar index in the later part of the day also aided the rise of the domestic currency, dealers said. The dollar index fell as the US government shut down much of its operations on Wednesday as deep partisan divisions prevented the Congress and the White House from reaching a funding deal. The shutdown could risk delaying of economic data releases, including the crucial jobs report later this week. At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.69, against 97.79 Tuesday and 97.94 Monday. 

 

Meanwhile, some banks bought dollars on behalf of importers to make the most of the relatively lower dollar/rupee levels, which limited gains for the Indian unit.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.6900	88.7750	88.6475	88.7950	88.7875
1-year dlr/rupee fwd (paise)	204.00	205.55	205.60	203.35	205.59

 

FORWARDS

The one-year dollar/rupee forward premium ended largely steady as the RBI's Monetary Policy Committee Wednesday left the policy repo rate unchanged at 5.50%, in line with expectations, dealers said. The committee also retained its 'neutral' policy stance.

 

RBI Governor Malhotra noted that the policy decision was a fallout of the inflation outlook turning out to be more benign than previously projected. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.30%, against the previous close of 2.31%. On an absolute basis, the premium was 204.00 paise, against 205.96 paise Tuesday.

 

OUTLOOK

The currency market will be shut on Thursday. On Friday, the rupee will take cues from the movement in the dollar index after key US manufacturing PMI data, due 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 about US tariffs to continue weighing on the rupee. They also expect importers to continue buying dollars, wary of further decline in the rupee, which would exert downward pressure on the local unit. However, noting the central bank's relentless intervention in recent days, dealers expect the RBI to continue intervening through dollar sales and prevent the rupee from testing the psychologically crucial level of 89.00 a dollar.

 

"RBI policy announcement today (Wednesday) is unlikely to have any major impact on rupee's trajectory in the near term and we expect tariff news flow to remain the dominant driver," HDFC Bank said in a note. "We expect the USD/INR to trade with a depreciation bias in a range of 88.00-89.00 over the coming month."

 

The rupee is expected to move within a range of 88.50 to 88.90 against the dollar, with technical support pegged at 89.00 per dollar.

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India Rupee - World FX: Dollar index down as US govt shutdown begins; yen up

 

	AT 1545 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3471	1.3480	1.3435	1.3440
EUR/USD	1.1738	1.1779	1.1730	1.1734
NZD/USD	0.5813	0.5821	0.5787	0.5792
AUD/USD	0.6613	0.6620	0.6590	0.6610
USD/JPY	147.1260	148.2230	146.9030	147.8260
USD/CAD	1.3925	1.3933	1.3907	1.3916
EUR/JPY	172.7030	173.9110	172.6950	173.5300
CHF/USD	1.2559	1.2613	1.2547	1.2545
EUR/CHF	0.9347	0.9352	0.9335	0.9333

 

India Rupee - World FX: Dollar index down as US govt shutdown begins; yen up

 

MUMBAI – The dollar index fell slightly on Wednesday as the US government shut down much of its operations, as deep partisan divisions prevented Congress and the White House from reaching a funding deal. The shutdown could risk delaying the release of crucial economic data, including the jobs report later this week.

 

Meanwhile, US consumer confidence fell in September to a five-month low on growing concerns about job prospects and the broader economy. The consumer confidence index fell to 94.2, data released Tuesday showed. The median estimate in a Bloomberg survey of economists was 96. However, data showed job openings, a measure of labour demand, rose marginally in August. 

 

At 1545 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.69, against 97.79 Tuesday and 97.94 Monday. The New Zealand dollar rose 0.4% against the US dollar, while the Australian dollar remained steady. The Swiss franc rose 0.1% against the greenback.

 

The Japanese yen rose 0.5% against the greenback even after a survey on Wednesday showed confidence among major Japanese manufacturers improved for the second consecutive quarter, and firms maintained their high spending plans, increasing the chances of an interest rate hike by the Japanese central bank as soon as this month.

The euro rose 0.1% against the dollar after data Wednesday showed inflation in the Eurozone accelerated last month on higher services prices and a smaller decline in energy costs, likely reinforcing bets on the European Central Bank keeping interest rates on hold for some time. However, a survey showed on Wednesday that Eurozone manufacturing activity slipped back into contraction in September. The HCOB Eurozone Manufacturing Purchasing Managers' Index fell to 49.8 in September from 50.7 in August.

 

The pound sterling rose 0.2% against the dollar even after data Wednesday showed that the UK's manufacturing activity shrank at the fastest pace in five months in September. The S&P Global Purchasing Managers' Index for the UK's manufacturing sector fell to 46.2 in September from 47.0 in August, in line with expectations in a Reuters poll. (Rati Chaphekar)

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India Rupee: Premium steady as MPC keeps repo rate unch, in line with view

 

	AT 1425 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.6700	88.7800	88.6475	88.7950	88.7875
1-year dlr/rupee fwd (paise)	204.00	205.55	205.60	203.35	205.96

 

India Rupee: Premium steady as MPC keeps repo rate unchanged, in line with view

 

MUMBAI – The one-year dollar/rupee forward premium was largely steady as the Reserve Bank of India's Monetary Policy Committee Wednesday left the policy repo rate unchanged at 5.50%, in line with expectations, dealers said. The committee also retained its "neutral" policy stance.

 

RBI Governor Sanjay Malhotra noted that the policy decision was a fallout of the inflation outlook turning out to be more benign than previously projected. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

 

"Nothing new has happened. I was expecting no rate cut and that is exactly what was delivered," a dealer at a private-sector bank said. "Maybe after this there will be a cut, but there is still some uncertainty on that." 

 

At 1425 IST, the one-year exact period dollar/rupee forward premium was 2.30%, against the previous close of 2.31%. On an absolute basis, the premium was 204.00 paise, against 205.96 paise Tuesday.  (Pratiksha)

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India Rupee: Up as RBI proposes steps for FX mkt, rupee internationalisation

 

	AT 1410 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.6700	88.7750	88.7500	88.7950	88.7875

 

MUMBAI – The rupee rose against the dollar Wednesday after the Reserve Bank of India rolled out a series of foreign exchange measures, including steps to boost internationalisation of the Indian unit, at the outcome of the Monetary Policy Committee's meeting, dealers said. "The newly announced policy measures have boosted confidence in exporters," a dealer at a private-sector bank said. "I can see it (the rupee) easily going up to 88.50 (a dollar) and staying there until some downward pressure from the US tariff front."

 

The RBI has proposed extending the time period for repatriation from accounts held by exporters in IFSC. It also announced relaxation of compliance requirements for small value exporters and importers. It has proposed to increase the period for foreign exchange outlays from four months to six months, in the case of merchant trade transactions.

 

The central bank also announced several measures to promote rupee internationalisation, including allowing banks to lend in rupees to businesses in neighbouring countries and setting official reference exchange rates for major trading partner's currencies.

 

The RBI's Monetary Policy Committee left the policy repo rate unchanged at 5.50% and retained its 'neutral' policy stance. Meanwhile, some banks bought dollars on behalf of importers to make the most of the relatively lower dollar/rupee levels, which weighed on the Indian unit, dealers said.

 

For the rest of the day, the rupee is seen moving in a range of 88.60 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 - Oct 1

 

MUMBAI – At 1150 IST, the rupee was at 88.6500 per dollar. At 0900 IST, the rupee was at 88.7750 a dollar, against a previous close of 88.7875 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
State-owned bank	88.80	88.75	88.60	88.55
Private-sector bank	88.90	88.80	88.60	88.50
Brokerage firm	88.70	88.65	88.40	88.30

 

(Rati Chaphekar)

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India Rupee: Steady as RBI leaves repo rate unch, RBI sales in NDF support

 

	AT 1010 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.7650	88.7750	88.7500	88.7950	88.7875

 

India Rupee: Steady as RBI leaves repo rate unch, RBI sales in NDF support

 

MUMBAI – The rupee traded steady against the dollar Wednesday as the Reserve Bank of India's Monetary Policy Committee kept the key policy rate unchanged at 5.50%, dealers said. 

 

Before the domestic spot market opened, the Indian unit traded at 88.8500 a dollar in the offshore non-deliverable forwards market. The Reserve Bank of India likely sold dollars in the offshore NDF market to prevent the rupee from hitting a fresh lifetime low. The spot rupee hit a record low of 88.8025 a dollar Tuesday. 

 

"There was some selling by nats (nationalised banks) in the NDF market even today (Wednesday)," a dealer at a private-sector bank said. "However, the selling was not aggressive in nature."

 

Dealers expect importers to step in to buy dollars later in the day, fearing further depreciation in the Indian unit, which could weigh on the local unit. The dealers also expect the RBI to step in to sell dollars to control the fall in the Indian unit, in case downward pressure on the rupee increases. 

 

For the rest of the day, the rupee is seen moving in a range of 88.60 and 89.00 against the greenback. Dealers peg immediate technical resistance for the rupee at 88.60 a dollar and support at 89.00.  (Rati Chaphekar)

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India Rupee - Asia FX: Fall on US govt shutdown worries, S Korean won down 0.2%

 

MUMBAI – Asian currencies traded lower Wednesday ahead of a US government shutdown that is bound to take effect from midnight Eastern time (0930 IST). Till Tuesday, Democrats and Republicans failed to agree on a key bill that would keep the operations running, and a last-minute resolution seems to be a distant dream, as Democrats and Republicans have shown no intention of bridging their divide.

 

At 0900 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.82, against 97.79 Tuesday and 97.94 Monday. The Indonesian rupiah and Malaysian ringgit fell 0.1?ch against the greenback, and the Philippine peso fell 0.2%. 

 

The South Korean won fell 0.2% against the greenback even after data early Wednesday showed the country's factory activity expanded for the first time in eight months in September. The purchasing managers' index for manufacturers in Asia's fourth-largest economy, stood at 50.7 in September, up from 48.3 in August.

 

The Taiwan dollar fell 0.1% against the dollar after the country ruled out any agreement with the US to divide semiconductor production equally, its top tariff negotiator said Wednesday, stressing that the matter was not even raised during the recent trade discussions. Washington has been pushing Taipei to shift investment and chip production to the US so that half of the chips are manufactured domestically, a move that could have implications for Taiwan's national defence. The Chinese yuan traded steady against the greenback. 

 

The Thai baht fell 0.1% against the greenback as Thailand's gold trade industry resisted the Bank of Thailand's proposed tax to slow the baht's rise, fearing adverse impact on business and Thailand's trading hub status. Strength in the baht, now hovering near a four-year-high, is seen as a threat to exports and tourism.  (Rati Chaphekar)

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India Rupee: Expected range for rupee - Oct 1

 

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: 

 

PARTICIPANT	SUPPORT	RESISTANCE
Foreign bank	89.00	88.65
Brokerage firm	89.20	88.60
Brokerage firm	89.00	88.75
Brokerage firm	88.92	88.72

 

 

 

 

 

 

 

(Rati Chaphekar)

 

End

 

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

 

Edited by Avishek Dutta

 

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