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Informist, Monday, Oct. 6, 2025

 

By Rati Chaphekar 

 

MUMBAI – The rupee ended steady against the dollar Monday as persistent intervention by the Reserve Bank of India offset the impact of continuous dollar purchases on behalf of importers, dealers said. "We expected the rupee to go past the 88.80 (a dollar) level today (Monday)," a dealer at a private-sector bank said. "But it looks like RBI is protecting the level quite aggressively, although I think this level should not continue for long."

 

The domestic currency traded in a tight range of six paise during the day and settled at 88.7800 a dollar, broadly unchanged from its previous close of 88.7725. The Indian unit was an outperformer amongst its peers. Other Asian currencies fell 0.1-0.8% against the dollar, as the Japanese yen tumbled almost 2%.

 

The Indian unit started the day slightly higher against the dollar as the RBI likely sold dollars in the offshore non-deliverable forwards market before the spot market opened. The central bank has actively intervened in the offshore NDF market, along with the spot market, over the past few weeks to protect the rupee from sharp depreciation. 

 

Banks persistently bought dollars on behalf of importers, who feared further depreciation in the Indian unit. "Importers were buying (dollars) throughout the day," a dealer at another private-sector bank said. "Everyone is hedging their positions as no one knows for how long the RBI will protect these levels, but once this breaks, it will be a sharp fall for sure." 

 

The rupee has been on a weakening spree amid the prevailing uncertainty around the India-US trade deal, with Washington imposing steep tariffs on New Delhi. Last month, the rupee depreciated 0.7% against the dollar, hitting a record low of 88.8025 a dollar. 

 

Moreover, the dollar index rose in early trade Monday due to a sharp fall in the Japanese yen after Sanae Takaichi was elected leader of the ruling party, reducing bets of the central bank hiking interest rates this month. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.38, against 97.71 Friday and 97.86 Thursday.

 

The dollar index rose further in European trade, increasing downward pressure on the Indian unit, as the euro fell sharply after France's new Prime Minister Sebastien Lecornu unexpectedly resigned Monday following weeks of political pressure and large-scale protests over proposed public spending cuts. A fall in other Asian currencies also weighed on the local unit, according to dealers. 

 

However, the central bank kept its grip on the Indian unit intact throughout the day and actively sold dollars in the domestic spot market, which prevented the rupee from hitting a lifetime low. The rupee touched a low of 88.7975 during the day, just shy of its record low. "The RBI will have to allow a slow depreciation in the rupee at least. I am expecting that to happen in some days. Just holding one level is not sustainable," a dealer at a state-owned bank said. 

 

A rise in domestic equities also supported the Indian unit, dealers said. Monday, the Nifty 50 and the Sensex rose 0.7?ch. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.7800	88.7325	88.7300	88.7975	88.7725
1-year dlr/rupee fwd (paise)	202.90	204.40	205.80	202.90	205.08

 

FORWARDS

The one-year dollar/rupee forward premium ended at a one-month low Monday due to a rise in US Treasury yields, dealers said. Forwards of a currency pair reflect the interest rate differential between the two countries. US Treasury yields rose as investors assessed the economic impact of the continuing US government shutdown following the failure of lawmakers to reach a funding agreement. The 10-year US bond yield rose to 4.13% Friday against 4.10% Thursday. 

 

Moreover, some dealers speculated that the RBI possibly sold dollars for near-tenure forward delivery in order to offset its spot interventions and avoid draining rupee liquidity, which also weighed on the forward premiums. A buy-sell swap entails buying dollars for immediate delivery and entering into a contract to sell these at a future date, thereby postponing the drain on systemic liquidity. 

 

However, banks' forward dollar purchases on behalf of importers, on the expectation of a further depreciation in the rupee, limited losses for premiums, dealers said. 

 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.29%, against the previous close of 2.31%. On an absolute basis, the premium was 202.90 paise, against 205.08 paise Friday.

 

OUTLOOK

On Tuesday, the rupee will take cues from the movement in the dollar index and other Asian currencies, dealers said. Market participants will continue to closely monitor developments related to India-US trade talks. They expect a weak risk appetite among investors amid uncertainty about US tariffs, which is expected to continue weighing on the rupee. "There has been no news on the trade deal front of late. So in that case, the negative bias is only increasing for the rupee," a dealer at a foreign bank said. 

 

Dealers also expect importers to continue buying dollars, as they are wary of a further decline in the rupee, which would exert downward pressure on the local unit. However, they expect the RBI to continue intervening through dollar sales and prevent the rupee from testing the psychologically crucial level of 89.00 a dollar.

 

The Indian currency may also receive support from foreign portfolio inflows linked to initial public offerings of domestic companies, dealers said. Tata Capital's IPO, which opened on Monday, will close on Wednesday. LG Electronics India's initial public offer will open for subscription on Tuesday and close on Thursday. 

 

"It is a month of big IPOs, so we can see some major FPI inflows," a dealer at another state-owned bank said. "In that case, RBI may get a break from selling (dollars) at least for a few days."

 

The rupee is expected to move in a range of 88.50 to 88.90 against the dollar. Immediate technical support for the rupee is pegged at 88.80 per dollar, a break of which can push the rupee to 89.00, they said.

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India Rupee - World FX: Euro slumps as France's new PM resigns; yen down 2%

 

	AT 1500 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3432	1.3464	1.3419	1.3477
EUR/USD	1.1663	1.1731	1.1652	1.1741
NZD/USD	0.5813	0.5840	0.5813	0.5830
AUD/USD	0.6594	0.6618	0.6583	0.6600
USD/JPY	150.3900	150.4350	149.0570	147.4400
USD/CAD	1.3955	1.3967	1.3942	1.3964
EUR/JPY	175.4070	176.2651	174.7660	173.0907
CHF/USD	1.2519	1.2573	1.2508	1.2563
EUR/CHF	0.9315	0.9346	0.9312	0.9339

 

India Rupee - World FX: Euro slumps as France's new PM resigns; yen down 2% 

 

MUMBAI – The euro slumped 0.7% against the greenback after France's new Prime Minister Sebastien Lecornu unexpectedly resigned Monday. The resignation came just hours after he announced part of his new Cabinet, which was formed following weeks of political pressure and large-scale protests over proposed public spending cuts. The sudden resignation marked another major deepening of France's political crisis. 

 

Meanwhile, European Central Bank Chief Economist Philip Lane said Monday shifts in the risk profile of euro zone inflation will impact ECB policy decisions and a rise in the chance of undershooting the target would firm the case for a 'slight' reduction in borrowing costs. 

 

The Japanese yen tumbled almost 2% against the greenback after Sanae Takaichi was elected leader of the ruling party, putting her on course to become Japan's first female prime minister. Takaichi is seen having expansionary fiscal policies. Her expansionist economic policy has reduced bets that the central bank will hike interest rates this month. Japan's long term bonds, 30-year Japanese government bond plunged, sending the yield to a record high. 

 

The dollar index rose further during European trade, tracking the sharp fall in the Japanese yen and euro. At 1500 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.42, against 97.71 Friday and 97.86 Thursday. 

 

The pound sterling and swiss franc fell 0.4% against the greenback. The Australian dollar traded steady against the dollar while the New Zealand dollar fell 0.1%.  (Rati Chaphekar) 

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India Rupee: Remains steady as RBI's active intervention prevents record low

 

	AT 1300 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.7800	88.7325	88.7325	88.7925	88.7725

 

India Rupee: Remains steady as RBI's active intervention prevents record low

 

MUMBAI – The rupee remained steady against the dollar, moving in a tight range, as public sector banks sold dollars, likely on behalf of the Reserve Bank of India, which offset the downward pressure from dollar buying by importers, dealers said. The rupee has moved in a range of just 6 paise so far Monday. 

 

"Buying (of dollars) pressure is there in the market," a dealer at a private sector bank said. "Nats (nationalised banks) are selling (dollars). That has prevented the rupee from breaching the 88.80 (a dollar) level." 

 

Dealers said banks continuously bought dollars on behalf of importers, who were wary of further depreciation in the Indian unit. Last month, the rupee depreciated 0.7% against the dollar, hitting a record low of 88.8025 a dollar. 

 

The central bank actively intervened through dollar sales at around 88.79 a dollar, which prevented the rupee from hitting a lifetime low, according to dealers. The Indian unit touched a low of 88.7925 during the day, just shy of its lifetime low. The central bank has been actively intervening at around 88.80 a dollar for the last few weeks. 

 

Earlier in the day, the RBI sold dollars in the offshore non-deliverable forwards market before the domestic spot market opened, which provided some support to the Indian currency. The Indian unit opened at 88.7325 a dollar Monday, against the previous close of 88.7725. 

 

The dollar index rose as the Japanese yen slumped after Sanae Takaichi won the Liberal Democratic Party leadership election over the weekend, reducing bets of the central bank hiking interest rates this month. This also weighed on the Indian unit, dealers said. At 1300 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.17, against 97.71 Friday and 97.86 Thursday.

 

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 support for the rupee at 88.80. (Rati Chaphekar)

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India Rupee: Technical levels for rupee - Oct 6

 

MUMBAI – At 1102 IST, the rupee was at 88.7700 per dollar. At 0900 IST, the rupee was at 88.7325 a dollar, against a previous close of 88.7725 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	88.90	88.85	88.60	88.55
Private-sector bank	88.86	88.85	88.65	88.60
Brokerage firm	89.00	88.80	88.35	88.00
Brokerage firm	89.20	89.00	88.50	88.40

 

(Rati Chaphekar)

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India Rupee: Steady as RBI's likely dlr sales in NDF offset importers' buys

 

	AT 0955 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.7550	88.7325	88.7325	88.7725	88.7725

 

India Rupee: Steady as RBI's likely dlr sales in NDF offset importers' buys

 

MUMBAI – The rupee traded steady against the dollar as the impact of dollar purchases on behalf of importers was offset by likely dollar sales by the Reserve Bank of India in the offshore non-deliverable forwards market, dealers said.

 

"Offshore (dollar/rupee) levels were a bit higher, but did not translate to onshore," a dealer at a private sector bank said. "I think we will see the same range bound trade today also." Some dealers speculated that the central bank intervened in the spot market as well to support the local unit. The RBI has been actively intervening around 88.80 a dollar since the last few weeks. 

 

The rupee was trading around 88.77 a dollar in the offshore NDF market before the opening of the domestic spot market, where it opened at 88.7325, thanks to the central bank's likely intervention in the offshore market, dealers said. 

 

Meanwhile, banks bought dollars on behalf of importers on expectations that the Indian unit may depreciate further in the near term, dealers said. The rupee fell to a record low of 88.8025 last week. 

 

Moreover, the dollar index rose in early trade Monday as the Japanese yen slumped after Sanae Takaichi won the Liberal Democratic Party leadership election over the weekend, reducing bets of the central bank hiking interest rates this month. At 0955 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.02, against 97.71 Friday and 97.86 Thursday.

 

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 support for the rupee at 88.80. (Rati Chaphekar and Pratiksha)

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India Rupee - Asia FX: Most fall; yen tumbles as Japan set to get new PM

 

MUMBAI – Most Asian currencies fell against the dollar Monday, tracking a slump in the Japanese yen after Sanae Takaichi was elected leader of the ruling party, putting her on course to become Japan's first female prime minister.

 

The yen tumbled against the dollar Monday as Takaichi is seen having expansionary fiscal policies. Her expansionist economic policy has reduced bets that the central bank will hike interest rates this month. The Japanese yen fell over 1.6% against the greenback Monday. 

 

"Takaichi's victory suggests a potential shift toward more stimulative fiscal policy in the near term amid rising prices. On monetary policy, the BoJ may proceed with a gradual pace of rate normalization," MUFG Bank said in a note. 

 

The dollar index rose following the decline in the Japanese yen. At 0930 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.04, against 97.71 Friday and 97.86 Thursday. 

 

The Taiwan dollar fell 0.5% against the dollar, the most among its peers, and the Phillipne peso fell 0.4%. The South Korean won fell 0.2% against the greenback. South Korea's stock market is shut Monday. The Thai baht fell 0.1% ahead of the country's inflation data later in the day, which is likely to show headline inflation remaining in prolonged deflation. 

 

The Indonesian rupiah fell 0.2% against the dollar and the Malaysian ringgit was down 0.1%. Bucking the trend, the Chinese yuan traded steady against the greenback. (Rati Chaphekar)

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India Rupee: Expected range for rupee - Oct 6

 

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	88.90	88.60
Foreign bank	88.90	88.60
Private-sector bank	89.00	88.60
Brokerage firm	88.90	88.70
Brokerage firm	88.90	88.50
Brokerage firm	88.88	88.68
Brokerage firm	88.85	88.68

 

 

 

 

 

 

 

 

 

 

 

(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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