India Rupee Review
At record closing low; RBI's dollar sales limit fall
This story was originally published at 17:32 IST on 8 October 2025
Register to read our real-time news.Informist, Wednesday, Oct. 8, 2025
By Pratiksha and Rati Chaphekar
NEW DELHI – The rupee ended at a record closing low against the dollar Wednesday owing to a surge in the dollar index and continuous dollar purchases on behalf of importers, dealers said. However, the Reserve Bank of India's continuous dollar sales limited the rupee's fall and prevented it from hitting a lifetime low, they said.
"The market was trading in a tight range throughout the day. We were seeing bids (dollar buying) and offers (dollar selling), both in large volumes. At this point, nobody knows till how long RBI will protect this one level," a dealer at a state-owned bank said.
After moving in a tight band of 5 paise during the day, the rupee settled at 88.7975 a dollar, little changed from 88.7725 on Tuesday. Other Asian currencies fell 0.1-0.9% against the dollar, with the South Korean won being the worst-hit.
The rupee was trading around 88.80 a dollar in the offshore non-deliverable forwards market shortly before the opening of the domestic spot market, where it opened at 88.7500, thanks to the RBI's likely dollar sales in the offshore NDF market, dealers said. The central bank has been actively intervening in both the offshore NDF and spot markets for the past few weeks, likely to prevent the rupee from breaching the psychologically crucial 89 per dollar level.
The Indian currency was weighed by a surge in the dollar index amid increasing uncertainty related to the US government shutdown. The US government shut down last week as Democrats and Republicans were unable to agree on a budget for the government's new fiscal year. The shutdown has entered its second week, with no signs of it ending in the near future. This has delayed the release of the closely watched monthly jobs report for September, and is set to postpone other key releases.
At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.92, against 98.57 Tuesday and 98.12 Monday. The index rose to 98.99 during the day, its highest level since Aug. 11.
Further, banks persistently bought dollars on behalf of importers, who were wary of a further depreciation in the rupee, which also weighed on the Indian unit, they said.
However, shortly after the market opened, public sector banks stepped in to sell dollars, likely on behalf of the central bank, which supported the Indian unit, they said. Some dealers said the RBI likely sold around $2 billion in the spot market to stop the rupee from moving beyond 88.80 a dollar.
"The nationalised banks were selling (dollars) quite aggressively today (Wednesday)," a dealer at a state-owned bank said. "But, a lot of negative factors like a rise in the dollar index and importer buying were weighing on the rupee."
While some foreign banks sold dollars on behalf of overseas investors, looking to invest in the initial public offerings of domestic companies, the quantum of the foreign inflows was subdued, dealers said. "We expected some major flows from FPIs for Tata Capital and LG IPOs," a dealer at a private-sector bank said. "Maybe some flows can be seen in the later part of the week or next week." Tata Capital's IPO opened Monday and will close Wednesday. LG Electronics India's public offer opened Tuesday and will close on Thursday. The initial public offering of Canara HSBC Life Insurance will open on Friday and close on Oct. 14, with anchor investment bidding slated for Thursday.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 88.7975 | 88.7500 | 88.7500 | 88.8000 | 88.7725 |
| 1-year dlr/rupee fwd (paise) | 196.98 | 197.00 | 197.76 | 193.93 | 196.95 |
FORWARDS
The one-year dollar/rupee forward premium ended off its day's low as banks stepped in to buy dollars for forward delivery on behalf of importers, noting the relatively lower premiums, dealers said. A fall in US Treasury yields also aided the forward premiums, they said.
During the day, forward premiums declined across tenures, with the one-year forward premium hitting a near seven-week low, as the RBI likely sold dollars for long-tenure forward delivery to offset the impact of its spot interventions on rupee liquidity, dealers said. The RBI likely sold forward dollars for maturity in 15 to 18 months, they said.
Since spot dollar sales drain rupee liquidity from the banking system, the RBI conducts buy-sell swaps to replenish liquidity. 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 the rupee liquidity. The RBI is likely to have conducted buy-sell swaps in the last two days as well, according to dealers.
The RBI's recent buy/sell swaps in the forwards market will add to its net outstanding short positions in forward contracts, which have declined for six straight months till August. RBI's net outstanding short positions in dollar/rupee forward contracts were at $53.36 billion at the end of August.
After touching a low of 2.17% during the day, the one-year exact period dollar/rupee forward premium ended at 2.20%, against the previous close of 2.22%. On an absolute basis, the premium was 196.98 paise, against 196.95 paise Tuesday.
OUTLOOK
On Thursday, the rupee will take cues from 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.
Commerce and Industry Minister Piyush Goyal said Wednesday that the Indian government is assessing the impact of the US government shutdown on the ongoing negotiations between New Delhi and Washington and may have clarity on the issue in another week. Trade deal negotiations are usually an ongoing process, and the dialogues are continuing, Goyal said. The timeline for the next round of negotiations is yet to be finalised, he said.
Market participants will keep a close watch on the central bank's intervention in the currency market, expecting it to continue intervening through dollar sales and preventing the rupee from testing the psychologically crucial level of 89.00 a dollar. "I think the RBI wants to keep its reserves robust, given the ongoing global uncertainty and being a bit conservative in selling (dollars)," a dealer at another state-owned bank said. "We really don't know what their threshold is."
Importers may also continue buying dollars, wary of a further decline in the rupee, which would exert downward pressure on the local unit, they said. "Importers are buying (dollars) a lot, maybe they are hedging their positions as the RBI has protected this level for long and it is time for it (the RBI) to let it (the rupee) go," a dealer at a private sector bank said.
Dealers expect the Indian currency to get some support from foreign inflows into the initial public offerings of domestic companies. The rupee is expected to move in a range of 88.60 to 89.00 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.
India Rupee - World FX: New Zealand dlr dn post 50-bps rate cut by central bk
| AT 1425 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3412 | 1.3435 | 1.3384 | 1.3426 |
| EUR/USD | 1.1622 | 1.1662 | 1.1607 | 1.1658 |
| NZD/USD | 0.5758 | 0.5801 | 0.5737 | 0.5799 |
| AUD/USD | 0.6563 | 0.6586 | 0.6557 | 0.6580 |
| USD/JPY | 152.6420 | 152.6450 | 151.7450 | 151.8720 |
| USD/CAD | 1.3952 | 1.3971 | 1.3949 | 1.3944 |
| EUR/JPY | 177.3870 | 177.4650 | 176.9018 | 177.0000 |
| CHF/USD | 1.2485 | 1.2533 | 1.2466 | 1.2514 |
| EUR/CHF | 0.9307 | 0.9323 | 0.9300 | 0.9300 |
MUMBAI – The New Zealand dollar dropped 0.7% against the greenback after the Reserve Bank of New Zealand surprisingly slashed its benchmark rate by 50 basis points to 2.50% Wednesday. The central bank signalled concerns about the slowing economy and kept the door open for further easing. The central bank has cut rates by 300 basis points since August 2024. The Australian dollar fell 0.2% against the dollar.
The dollar index rose to a near two-month-high amid looming uncertainty around the US government shutdown. The US government shut down last week as Democrats and Republicans were unable to agree on a budget for the government's new fiscal year. The shutdown has entered its second week, with no signs of it ending in the near future. This delayed last Friday's closely watched monthly jobs report for September, and is set to postpone other key releases until the government reopens.
At 1425 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.85, against 98.57 Tuesday and 98.12 Monday.
The Japanese yen fell 0.3% against the greenback after data on Wednesday showed Japanese workers' real wages declined for the eighth consecutive month in August. The inflation-adjusted real wages, a key barometer of Japanese households' purchasing power, fell 1.4% on year in August after a 0.2% drop in July.
The euro fell 0.2% against the dollar after data Wednesday showed industrial production in Germany, Europe's largest economy, fell 4.3% in September compared to August. Analysts polled by Reuters had predicted a 1.0?ll.
The pound sterling fell 0.1% against the dollar. UK's statistics office Wednesday said government borrowing in the previous and current fiscal years was a combined $4.02 billion, lower than previously reported after a value added tax receipt data error was found. The Swiss franc fell 0.3% against the greenback. (Rati Chaphekar)
India Rupee: In thin band as RBI's active dlr sales offset importers' buys
| AT 1355 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 88.7650 | 88.7500 | 88.7500 | 88.7925 | 88.7725 |
MUMBAI – The rupee remained in a thin band against the dollar as public sector banks sold dollars continuously, likely on behalf of the Reserve bank of India, which neutralised the impact of dollar purchases by importers and a surge in the dollar index, dealers said. The rupee has traded in a range of just 4 paise so far Wednesday.
"There's a lot of demand (for dollars) in the market, but nothing is reflecting in the levels. RBI is defending the levels a lot," a dealer at a private-sector bank said.
The RBI actively sold dollars around 88.79 a dollar, which kept the rupee from falling to a record low, dealers said. The rupee touched a low of 88.7925 a dollar during the day, not too far from its lifetime low of 88.8025.
Banks persistently bought dollars on behalf of importers, who are wary of the rupee depreciating further going ahead, which weighed on the Indian unit, dealers said. The rupee has been falling due to the ongoing uncertainty about a trade deal between India and the US, with US President Donald Trump's sweeping tariffs on India.
Moreover, the dollar index rose to a near two-month-high owing to the prolonged US shutdown that shows no signs of ending, which also weighed on the Indian unit, dealers said. The extended shutdown pushed investors to flock towards the safe haven unit. At 1355 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.80, against 98.57 Tuesday and 98.12 Monday.
Some foreign banks sold dollars on behalf of overseas investors looking to invest in the ongoing initial public offerings of domestic companies, which also cushioned the Indian unit's fall, dealers said. Tata Capital's IPO opened Monday and will close Wednesday. LG Electronics India's public offer opened Tuesday and will close on Thursday.
For the rest of the day, the rupee is seen moving in a range of 88.60-88.80 against the greenback. Dealers peg immediate technical support for the rupee at 88.80 and resistance at 88.50. (Rati Chaphekar)
India Rupee: Premiums fall as RBI likely sells long-tenure forward dollars
| AT 1130 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 88.7800 | 88.7500 | 88.7500 | 88.7900 | 88.7725 |
| 1-year dlr/rupee fwd (paise) | 195.15 | 197.00 | 197.76 | 193.93 | 196.95 |
NEW DELHI – Dollar/rupee forward premiums declined across tenures Wednesday, with the one-year forward premium hitting a near-seven-week low, as the Reserve Bank of India likely sold dollars for long-tenure forward delivery, in order to neutralise its spot interventions and avert pushing out rupee liquidity, dealers said. The RBI likely sold forward dollar for maturnty in 15 to 18 months, they said.
"There is strong receiving from the RBI. Looks like they are going for the far tenures (of forward contracts) now due to the overall uncertainty in the near term," a dealer at a state-owned bank said. "They may not want to skew their near short forward book."
In the last few weeks, the central bank has been actively selling dollars in the domestic spot and offshore non-deliverable forwards market to prevent the Indian unit from falling sharply and testing the psychologically crucial 89-per-dollar mark. The RBI likely sold dollars around 88.79 a dollar on Wednesday as well, dealers said. The Indian currency fell to a record low of 88.8025 last week.
Since spot dollar sales draw out rupee liquidity from the banking system, the RBI conducts buy-sell swaps to replenish liquidity. 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. The RBI likely conducted buy-sell swaps in the last two days as well, according to dealers.
The RBI's recent buy/sell swaps in the forwards market will add to its net outstanding short positions in forward contracts, which have declined for six straight months till August. RBI's net outstanding short positions in dollar/rupee forward contracts were at $53.36 billion at the end of August.
At 1130 IST, the one-year exact period dollar/rupee forward premium was 2.18%, against the previous close of 2.22%. On an absolute basis, the premium was 195.15 paise, against 196.95 paise Tuesday. (Pratiksha)
India Rupee: Technical levels for rupee - Oct 8
MUMBAI – At 1100 IST, the rupee was at 88.7750 per dollar. At 0900 IST, the rupee was at 88.7500 a dollar, against the 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 |
| Private-sector bank | 89.00 | 88.80 | 88.50 | 88.30 |
| Brokerage firm | 89.00 | 88.80 | 88.40 | 88.20 |
| Brokerage firm | 88.85 | 88.80 | 88.60 | 88.50 |
(Rati Chaphekar)
India Rupee: Steady, RBI's likely dollar sales offset surge in dollar index
| AT 0945 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 88.7650 | 88.7500 | 88.7500 | 88.7775 | 88.7725 |
MUMBAI – The rupee was largely steady against the dollar Wednesday as some public sector banks sold dollars, likely on behalf of the Reserve Bank of India, which offset the impact of a surge in the dollar index, dealers said.
The central bank intervened in both the spot market and the offshore non-deliverable forwards market, likely to prevent the Indian unit from hitting a record low, as has been the case in the last few weeks, dealers said. Before the domestic spot market opened, the domestic currency was trading at around 88.80 a dollar, its record low, in the offshore NDF market. However, it opened at 88.7500 in the spot market, likely due to the central bank's intervention, dealers said.
The dollar index rose to a near two-month-high as heightened uncertainty related to the US government shutdown led to investors flocking towards the safe haven unit. The shutdown has delayed the release of key US economic data, which is important for investors to gauge the outlook of future rate cuts by the Federal Reserve.
"Today (Wednesday) there are high chances that the rupee will reach 88.85 (a dollar)," a dealer at a state-owned bank said. "The effect of dollar index is weighing heavily on the rupee." At 0945 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.87, against 98.57 Tuesday and 98.12 Monday.
Moreover, banks stepped in to buy dollars on behalf of importers, who are wary of further depreciation in the rupee, dealers said. "We are seeing stronger buying (of dollars) by oil importers. If this continues, we might see a fall past 88.80 (a dollar) in the day," a dealer at a private sector bank said.
Foreign inflows into initial public offerings of domestic companies may also support the domestic currency during the day, according to dealers. Tata Capital's IPO opened Monday and will close on Wednesday. LG Electronics India Ltd.'s public offer opened for subscription Tuesday and will close on 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)
India Rupee - Asia FX: Most fall as dollar surges; South Korean won dn 0.5%
MUMBAI – Most Asian currencies fell against the dollar Wednesday as the dollar index surged to a near two-month high amid increasing uncertainty over the US shutdown that came into effect last week. The shutdown has delayed the release of key economic data, keeping investors deprived of cues on the Federal Reserve's future rate cut trajectory.
The US government shut down last week as Democrats and Republicans were unable to agree on a budget for the government's new fiscal year. The shutdown has been extended for a second week, with no signs of it ending in the near future. This has made investors flock towards safe-haven assets, boosting demand for the dollar.
At 0912 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.89, against 98.57 Tuesday and 98.12 Monday. Tracking the sharp rise in the dollar index, the South Korean won fell 0.5% against the greenback, the most among its peers, while the Indonesian rupiah fell 0.3%.
The Malaysian ringgit fell 0.2% against the dollar ahead of Malaysia's national budget announcement scheduled for Friday. Malaysia's international reserves rose to an 11-month high of $123.6 billion in September from $122.7 billion in August, according to data released Tuesday. The Taiwan dollar fell 0.2% against the greenback and the Philippine peso fell 0.1%.
Bucking the trend, the Thai baht traded steady against the greenback as investors exercised caution ahead of Bank of Thailand's monetary policy meeting later in the day. Thailand's central bank is expected to cut the key policy rate by 25 basis points to support a slowing economy. Currently, Bank of Thailand's key policy rate stands at 1.50%. The Chinese yuan, too, traded steady against the dollar. (Rati Chaphekar)
India Rupee: Expected range for rupee - Oct 8
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 |
| State-owned bank | 88.85 | 88.60 |
| Foreign bank | 88.90 | 88.65 |
| Brokerage firm | 88.90 | 88.50 |
| Brokerage firm | 88.84 | 88.68 |
| Brokerage firm | 88.90 | 88.73 |
(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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