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Informist, Monday, Oct. 20, 2025

 

By Rati Chaphekar 

 

MUMBAI – The rupee ended off the day's high against the dollar Monday as banks bought dollars on behalf of importers, who wanted to make the most of the relatively lower dollar/rupee levels, dealers said. Earlier in the day, the Indian unit was supported by dollar sales by some public sector banks, likely on behalf of the Reserve Bank of India, dealers said.

 

Trade volume remained thin during the day ahead of holidays on Tuesday and Wednesday for Diwali. "Today was a good day to trade as the levels were very well below 88.00 (a dollar)," a dealer at a state-owned bank said. "But volumes were dull though, it looks like many people missed the bus."

 

After touching a high of 87.7300 a dollar earlier in the day, the Indian unit settled at 87.9275 against 87.9750 on Friday. Other Asian currencies rose 0.1-0.4% against the greenback, with the Thai baht gaining the most.

 

The rupee started the day slightly higher against the dollar and rose further as the RBI likely stepped in through dollar sales. The central bank continued its intervening streak and took the Indian unit to the day's high of 87.73 a dollar. Some dealers speculated that the central bank may have sold dollars in the offshore non-deliverable forwards market before the spot market opening as well, which supported the Indian unit.

 

The central bank likely sold dollars to prevent the rupee from falling below the 88-per-dollar mark, they said. "I think what RBI is going for is giving the rupee initial support and then letting it move from there. That's what happened today," a dealer at a state-owned bank said.

 

However, importers took take advantage of the rupee's appreciation to buy dollars, which erased most of the gains of the Indian unit, dealers said. The currency market volume remained thin as traders appear to have taken an off on account of Diwali.

 

"The sharp movements (in the rupee) we saw today were mainly because of dull volumes," a dealer at a private-sector bank said. "We will see regular trade from Thursday, for how long the central bank protects 88.00 (a dollar) level will be something to look forward to."

 

The rupee also got support from a slight fall of the dollar index as trade tensions between the US and China appeared to be easing. US Treasury Secretary Scott Bessent Friday said he expects to meet Chinese Vice Premier He Lifeng in Malaysia this week to try to forestall escalation of US tariffs on Chinese goods that President Donald Trump said were "unsustainable."

 

However, the dollar index recovered most of its fall in European trade, which added to the downward pressure on the Indian unit, dealers said. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.46, down from 98.54 Friday but up from 98.34 Thursday.

 

The rise in Indian stock market indices also supported the rupee, dealers said. On Monday, both the Nifty 50 and Sensex ended 0.5% higher.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.9275	87.9350	87.7300	87.9625	87.9750
1-year dlr/rupee fwd (paise)	200.73	201.30	201.73	199.30	200.53

 

FORWARDS

The one-year dollar/rupee forward premium ended slightly lower as US Treasury yields rose after worries about rising trade tensions between the US and China and the credit quality of regional US banks faded, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

 

US President Donald Trump Friday said his 100% proposed tariff on goods from China would not be sustainable and confirmed he would meet Chinese President Xi Jinping in two weeks in South Korea despite doubts last week about whether the meeting would take place. Also, concerns about regional US banks and the credit market surfaced after Zions Bancorporation said it would take a charge-off on two commercial and industrial loans. However, worries about a contagion among the regional banks eased after robust earnings from several names in the sector.

 

Volume in the market was lower than usual as most traders are away on account of Diwali. At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.27%, against the previous close of 2.28%. On an absolute basis, the premium was 200.73 paise, against 200.53 paise Friday.

 

OUTLOOK

Currency markets are shut Tuesday and Wednesday on account of Diwali. On Thursday, the rupee will take cues from the movement of the dollar index, dealers said. The local unit may also track movement of other Asian currencies, they said.

 

Going by the recent trend, traders expect the RBI to continue intervening through dollar sales to prevent the Indian unit from falling below 88-per-dollar, they said.

 

Market participants will continue to closely monitor developments related to India-US trade talks. They will also monitor developments related to US-China trade tensions. "US-India trade talks continue to be uncertain. Till the time there's any clarity on that front, I think RBI will be very much present in the market," a dealer at a foreign bank said.

 

Dealers also expect importers to continue buying dollars, to make the most of the recent appreciation of the rupee, which would exert pressure on the local unit. The rupee has appreciated 0.8% against the dollar since last week.

 

The rupee is expected to move in a range of 87.50 to 88.00 against the dollar. Immediate technical resistance for the rupee is pegged at 87.60 per dollar, they said.

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India Rupee - World FX:Yen dn as Takaichi set to be PM; Australia dlr steady

 

	AT 1500 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3438	1.3443	1.3406	1.3426
EUR/USD	1.1663	1.1676	1.1652	1.1659
NZD/USD	0.5738	0.5743	0.5724	0.5718
AUD/USD	0.6499	0.6515	0.6487	0.6498
USD/JPY	150.4970	151.2000	150.2790	150.6100
USD/CAD	1.4028	1.4034	1.4006	1.4020
EUR/JPY	175.5230	176.3670	175.2070	175.6385
CHF/USD	1.2612	1.2624	1.2586	1.2606
EUR/CHF	0.9246	0.9262	0.9242	0.9247

 

MUMBAI – The Japanese yen fell 0.1% against the greenback as Sanae Takaichi from the Liberal Democratic Party, an advocate of fiscal and monetary stimulus, appeared all but certain to become Japan's next prime minister. The ruling Liberal Democratic Party and Japan Innovation Party will firm up an alliance on Monday. A parliamentary vote to choose a prime minister is set for Tuesday.

 

Takaichi is widely seen as a fiscal dove, pointing to more government spending and accommodative financial conditions in the coming months. Takaichi is also expected to oppose more interest rate hikes by the Bank of Japan, with the central bank set to decide on the same next week. 

 

The New Zealand dollar rose 0.2% against the dollar after data Monday showed the country's annual inflation accelerated in the third quarter, coming in at 3.0%, in line with analysts' forecasts and at the top end of the central bank's target range. The CPI rose 1.0% in the third quarter from the previous quarter. The CPI inflation growth was faster than the reading of 0.5% in the second quarter but in line with a Reuters poll.

 

The Australian dollar traded steady against the greenback. China left benchmark lending rates unchanged Monday for the fifth consecutive month, meeting market expectations, and despite signs of slowing economic momentum. The one-year loan prime rate for October was kept at 3.0%, while the five-year loan prime rate was unchanged at 3.5%. 

 

China's economic growth slowed to its weakest pace in a year in the September quarter, in line with market expectations. Data Monday showed GDP of the country grew 4.8% in Jul–Sept, slowing from 5.2% in the second quarter and in line with analysts' expectations of a rise of 4.8% in a Reuters poll. Any major development in China's economy affects the Australian dollar due to their strong bilateral trade ties. 

 

The dollar index erased almost all its early gains in European trade. At 1500 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.47, down from 98.54 Friday but up from 98.34 Thursday. The euro rose 0.1% against the greenback while the pound sterling fell 0.1%.  (Rati Chaphekar)

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India Rupee: Erases some gains as importers buy dollars; volume subdued

 

	AT 1335 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.8900	87.9350	87.8525	87.9625	87.9750

 

MUMBAI – The rupee erased some of its gains against the dollar as banks bought dollars on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said. The Indian unit touched a high of 87.7300 earlier in the day. 

 

Volume in the currency market remained lacklustre due to lack of enough dealers in the trading room on account of Diwali. The currency market will be shut on Tuesday and Wednesday due to the festival. "The sharp movements (in rupee) are mainly because of low volumes," a dealer at a state-owned bank said. "There is no high demand (of dollars) from the importer's side either. The rupee is largely rangebound."

 

Earlier in the day, some state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, which pushed the Indian unit to the day's high, dealers said. The central bank continued its streak of intervening in the market through dollar sales, likely to keep the Indian unit above the 88.00-a-dollar level, they said.

 

The dollar index came off its day's low in European trade, exerting downward pressure on the Indian unit, dealers said. At 1335 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.54, steady from 98.54 Friday and up from 98.34 Thursday. The index had fallen to 98.39 earlier in the day. 

 

A rise in domestic equities also supported the Indian unit, according to dealers. At 1335 IST, both the Nifty 50 and Sensex were up 0.5?ch.

 

For the rest of the day, the rupee is seen moving in a range of 87.60-88.00 against the greenback. Dealers peg immediate technical resistance for the rupee at 87.60. (Rati Chaphekar)

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India Rupee: Forward premium tad down as US yields rise; volume lacklustre

 

	AT 1310 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.8800	87.9350	87.7300	87.9625	87.9750
1-year dlr/rupee fwd (paise)	200.23	201.30	201.73	199.80	200.53

 

NEW DELHI – The one-year dollar/rupee forward premium fell slightly Monday as US Treasury yields rose after worries about rising trade tensions between the US and China and the credit quality in regional US banks faded, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries. 

 

US President Donald Trump said his 100% proposed tariff on goods from China would not be sustainable and confirmed he would meet with Chinese President Xi Jinping in two weeks in South Korea despite raising doubts last week that the meeting would happen. Moreover, concerns regarding regional US banks and the credit market surfaced after Zions Bancorporation said it would take a charge-off on two commercial and industrial loans. However, worries over contagion among the regional banks eased after robust earnings from several names in the sector. 

 

Meanwhile, volume in the market was lower than usual due to lack of enough traders in the dealing rooms on account of Diwali. The currency market will be shut on Tuesday and Wednesday due to the festival. "People are not trading much. It is all pretty quiet since it is a short week," a dealer at a private-sector bank said. 

 

At 1310 IST, the one-year exact period dollar/rupee forward premium was 2.27%, against the previous close of 2.28%. On an absolute basis, the premium was 200.23 paise, against 200.53 paise Friday.  (Pratiksha)

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India Rupee: Technical levels for rupee - Oct 20

 

MUMBAI – At 1130 IST, the rupee was at 87.7900 per dollar. At 0900 IST, the rupee was at 87.9350 a dollar, against the previous close of 87.9750 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	88.40	88.30	87.50	87.00
Brokerage firm	88.25	88.00	87.50	87.20
Brokerage firm	88.20	88.10	87.50	87.30

 

(Rati Chaphekar)

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India Rupee: Rises as PSU banks sell dollars, likely for RBI; volume dull

 

	AT 0950 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	87.8600	87.9350	87.8525	87.9625	87.9750

 

MUMBAI – The rupee rose against the dollar Monday as some state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, dealers said. "It seems like the RBI wants to keep the appreciation bias there for rupee, no matter what," a dealer at a private-sector bank said.

 

Some dealers speculated that the central bank may have sold dollars in the offshore non-deliverable forwards market before the spot market opening as well, which supported the Indan unit. The central bank likely sold dollars to prevent the Indian unit from falling below the 88-per-dollar mark, they said. 

 

However, volume in the currency market was lower than usual on Monday due to lack of enough market participants in dealing rooms on account of Diwali. The currency market will be shut on Tuesday and Wednesday due to the festival. "The rupee will likely be rangebound today (Monday)," a dealer at a state-owned bank said. "Some buyers (of dollars) are present but volumes are quite dull because of festive season."

 

The dollar index fell slightly as trade tensions between the US and China appeared to be easing, which supported the domestic currency. US Treasury Secretary Scott Bessent Friday said he expects to meet Chinese Vice Premier He Lifeng in Malaysia this week to try to forestall escalation of US tariffs on Chinese goods that President Donald Trump said were "unsustainable". At 0950 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.46, down from 98.54 Friday but up from 98.34 Thursday.

 

A rise in domestic equities also supported the Indian unit, according to dealers. At 0950 IST, bth the Nifty 50 and Sensex were up 0.5%.

 

For the rest of the day, the rupee is seen moving in a range of 87.60 and 88.00 against the greenback. Dealers peg immediate technical resistance for the rupee at 87.60. (Rati Chaphekar)

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India Rupee - Asia FX: Most up as US-China trade tensions ease; yuan steady

 

MUMBAI – Most Asian currencies rose Monday as the dollar index fell slightly after trade tensions between the two economic superpowers, the US and China, appeared to be easing. US Treasury Secretary Scott Bessent Friday said that he expects to meet next week with Chinese Vice Premier He Lifeng in Malaysia to try to forestall escalation of US tariffs on Chinese goods that President Donald Trump said was "unsustainable". 

 

At 0910 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.47, down from 98.54 Friday but up from 98.34 Thursday. Tracking the fall in dollar index, the Thai baht rose 0.3%, the most among its peers. The Malaysian ringgit, Philippine peso and Indonesian rupiah rose 0.1% against the greenback. 

The South Korean won rose 0.1% against the greenback after South Korea's chief policy advisor said on Sunday that the country has a higher chance of reaching a trade deal with the US by the time of the Asia-Pacific Economic Cooperation summit in South Korea later this month. While the two sides have made concrete progress in most issues, they need to iron out a couple of remaining items, advisor Kim Yong-beom said. 

 

Bucking the trend, the Chinese yuan traded steady against the dollar after China left benchmark lending rates unchanged Monday for the fifth consecutive month in October, meeting market expectations, and despite signs of slowing economic momentum. The one-year loan prime rate was kept at 3.0%, while the five-year loan prime rate was unchanged at 3.5%.

 

China's economic growth slowed to the weakest pace in a year in the third quarter, in line with market expectations. Data Monday showed GDP of the country grew 4.8% in Jul–Sept, slowing from 5.2% in the second quarter and in line with analysts' expectations of a rise of 4.8% in a Reuters poll. The Taiwan dollar rose 0.1% against the greenback. (Rati Chaphekar)

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India Rupee: Expected range for rupee - Oct 20

 

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
Private-sector bank	88.10	87.70
Foreign bank	88.30	87.70
Brokerage firm	88.30	87.80
Brokerage firm	88.05	87.75
Brokerage firm	88.10	87.80

 

 

 

 

 

 

 

 

(Rati Chaphekar)

 

End

 

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

 

Edited by Ashish Shirke

 

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