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Informist, Monday, Oct. 27, 2025

 

By Rati Chaphekar

 

MUMBAI – The rupee ended sharply down against the dollar as foreign banks persistently bought dollars for foreign portfolio investors looking to withdraw their funds from domestic equities, dealers said. Some public sector banks sold dollars throughout the day, likely on behalf of the Reserve Bank of India, which limited the domestic currency's fall, they said.

 

"It was a sudden, unexpected jerk today (Monday)," a dealer at a state-owned bank said. "PSUs (public sector units) were selling but not very aggressively; it looks like they were just limiting the fall, not targeting any level."

 

The Indian unit was one of the underperformers among its peers, falling 0.4% against the greenback. Most other Asian currencies rose 0.1-0.5% against the greenback, with the South Korean won gaining the most. After trading in a wide range of 45 paise during the day, the Indian unit ended the day at 88.2450 a dollar, as against 87.8450 on Friday.  

 

The rupee opened steady against the dollar but fell immediately as banks rushed to buy dollars for importers and oil marketing companies for their month-end payments. The importers bought dollars to take advantage of the lower dollar/rupee levels, wary of further depreciation in the Indian unit. 

The Indian unit continued its downward trend and slumped below the 88-per-dollar mark after more than a week, as some foreign banks bought dollars for foreign portfolio investors looking to pull out funds from domestic equities. However, losses in domestic currency were limited as some public-sector banks sold dollars, likely on behalf of the RBI. 

 

The central bank continued its streak of intervening in the market through dollar sales, as expected, around the 88.00-a-dollar level, limiting the loss in the domestic currency. However, the intervention was not aggressive enough to hold the rupee above the 88-a-dollar mark.

 

In the latter part of the day, the rupee slumped further as stop losses triggered and panic buying intensified pressure on the Indian currency. "Everyone expected the rupee to fall after Diwali, but the amount of fall was a lot for one day," a dealer at a private-sector bank said. "This led to stop losses being hit and panic buying in the market."

 

The losses to the domestic currency were limited as the dollar index fell slightly Monday due to expectations of a 25-basis-point rate cut by the Federal Reserve at its policy meeting this week. Data released Friday showed the US consumer price index rose 0.3% on month in September against a 0.4% increase projected in a Reuters poll. Weaker-than-expected data has strengthened the chances of a 25-basis-point rate cut at the US Federal Reserve's meeting ending Wednesday. 

 

Markets have fully priced in a 25 bps rate cut at the Fed's October meeting, but will watch the guidance on the rate-cut trajectory amid expectations of further incremental cuts. Fed funds futures traders are now pricing in a 96.7% chance of the Fed cutting interest rates by 25 bps this week, the CME FedWatch tool showed. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.81, down from 98.94 Friday and 98.92 Thursday. 

 

Additionally, the rupee was also supported by a rise in domestic equities. Monday, the Nifty 50 and the BSE Sensex both rose 0.7?ch.  

 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.2450	87.8600	87.8525	88.3025	87.8450
1-year dlr/rupee fwd (paise)	201.18	202.92	202.92	201.18	201.37

 

FORWARDS

The one-year dollar/rupee forward premium fell Monday as investors remain uncertain over the rate-cut trajectory in the US after the US Federal Open Market Committee's two-day meeting ends Wednesday. Despite the certainty of a 25-basis-point cut at the meeting following softer-than-expected inflation data, market participants are unsure about future rate cuts, dealers said.

 

US Treasury yields also rose, with the 10-year US yield remaining above 4%, which weighed on forward premiums, dealers said. The 10-year US bond yield rose to 4.02% Friday from 4.01% Thursday. Forwards of a currency pair reflect the interest rate differential between the two countries.

 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.28%, against the previous close of 2.29%. On an absolute basis, the premium was 201.18 paise, against 201.37 paise Friday.

 

OUTLOOK

On Tuesday, the rupee will take cues from movement in the dollar index ahead of the US Federal Open Market Committee's decision due Wednesday, dealers said. The local unit may also track movement of other Asian currencies, they said.

 

Traders will also closely watch out for any developments on the India-US trade deal. They will also monitor developments related to US-China trade tensions. "I see 88.50 on the cards now in a few days," a dealer at a state-owned bank said. "Now, any positive (news) on the India-US trade deal can be the only factor that will keep the rupee away from this level." 

 

Dealers also expect importers to continue buying dollars, to make the most of the recent appreciation in the rupee, which would exert pressure on the local unit. The rupee is expected to move in a range of 87.80 to 88.50 against the dollar. Immediate technical support for the rupee is pegged at 88.50 per dollar, they said.

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India Rupee: Forward premium down on uncertainty over rate cuts in US

 

	AT 1510 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.2500	87.8600	87.8525	88.3075	87.8450
1-year dlr/rupee fwd (paise)	201.18	202.92	202.92	200.95	201.37

 

MUMBAI – The one-year dollar/rupee forward premium fell Monday as investors remain uncertain over the rate-cut trajectory in the US after the US Federal Open Market Committee's two-day meeting ends Wednesday. Despite the certainty around a cut of 25 basis points at the meeting after softer-than-expected inflation data, market participants are unsure of future rate cuts, dealers said.

 

"Cannot really say what is going to happen after Wednesday, a cut is there for sure, but we want to see what happens after that," a dealer at a state-owned bank said. Market participants look forward to commentary from US Federal Reserve Officials after the meeting for guidance on future rate actions, they said.

 

Data released Friday showed the US CPI rose 0.3% on month in September against a 0.4% increase forecast by economists polled by Reuters and after climbing 0.4% in August. Weaker-than-expected data has strengthened the chances of a 25 basis-point rate cut at the FOMC meeting, dealers said.

 

US Treasury yields also rose, with the 10-year US yield remaining above the 4% level, which weighed on forward premiums, dealers said. The 10-year US bond yield rose to 4.02% Friday from 4.01% Thursday. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

 

At 1510 IST, the one-year exact period dollar/rupee forward premium was 2.28%, against the previous close of 2.29%. On an absolute basis, the premium was 201.18 paise, against 201.37 paise Friday.  (Kabir Sharma) 

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India Rupee - World FX: Yen up after strong econ data; Australia dlr up 0.3%

 

	AT 1350 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3321	1.3336	1.3311	1.3307
EUR/USD	1.1629	1.1648	1.1618	1.1623
NZD/USD	0.5759	0.5783	0.5752	0.5746
AUD/USD	0.6540	0.6548	0.6529	0.6509
USD/JPY	152.9020	153.2600	152.6640	152.8010
USD/CAD	1.3977	1.4007	1.3973	1.4000
EUR/JPY	177.8090	178.1420	177.6780	177.6400
CHF/USD	1.2554	1.2588	1.2543	1.2569
EUR/CHF	0.9262	0.9269	0.9250	0.9257

 

MUMBAI – The Japanese yen rose 0.1% against the greenback after data released Monday showed Japan's services Producer Price Index rose 3.0% in September from a year ago, accelerating from a 2.7% gain in August. The leading indicator of Japan's services-sector inflation perked up for the second straight month in September, backing up the central bank's view that rising labour costs will help keep inflation sustainably around its 2% target.

 

The Australian dollar rose 0.3% against the dollar after US Treasury Secretary Scott Bessent said in an interview with CBS News that US President Donald Trump's proposed 100% tariffs on Chinese imports are "essentially off the table". He added that China is expected to make significant soybean purchases from the US and to delay broad restrictions on rare earth exports. The US, however, will maintain its current export controls on China, Bessent said. Any development in China's economy affects Australia due to their strong bilateral trade ties. The New Zealand dollar rose 0.2% against the greenback.

 

The dollar index rose in European trade due to the uncertainty around the US government shutdown that has now entered its fifth week, making it the second longest US government shutdown. The shutdown has halted the release of key US economic data, which are important for market participants to gauge the further rate-cut trajectory of the US Federal Reserve. 

 

Markets have fully priced in a 25 basis-point rate cut at the Fed's October meeting but are still trying to gauge the policy path beyond October amid expectations of further incremental cuts. At 1350 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.96, up from 98.94 Friday and 98.92 Thursday.

 

Tracking the rise in the dollar index, the euro fell 0.1% against the greenback while the pound sterling traded steady.  (Rati Chaphekar)

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India Rupee: Slumps on dollar buys by foreign banks; RBI's dollar sales limit loss

 

	AT 1130 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.0700	87.8600	87.8525	88.0700	87.8450

 

MUMBAI – The rupee slumped below the 88-a-dollar mark after more than a week as some foreign banks bought dollars for foreign portfolio investors who were looking to pull out funds from domestic equities, dealers said. However, losses in the domestic currency were limited as some public sector banks sold dollars, likely on behalf of the Reserve Bank of India, they said. 

 

"Some selling by the nationalised banks was seen. However, it was not aggressive in nature," a dealer at a private sector bank said. "This also triggered some stop losses, which broke 88.00 a dollar level." The central bank intervened in the market through dollar sales by public sector banks around 88.00-a-dollar level, which limited the loss to the domestic currency.

 

The dollar index reversed its direction and rose an hour after the spot market opened, exerting further pressure on the Indian unit. At 1130 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.96, up from 98.94 Friday and 98.92 Thursday. 

 

However, the Indian unit was supported by a rise in domestic equities. At 1130 IST, the Nifty 50 index was up 0.7% and the BSE Sensex was up 0.8%. For the rest of the day, the rupee is seen moving in a range of 87.70 and 88.10 against the greenback. Dealers peg immediate technical support for the rupee at 88.00.  (Rati Chaphekar)

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India Rupee: Falls as importers' dollar demand kicks in; fall in dollar index aids

 

	AT 0925 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.9300	87.8600	87.8525	87.9325	87.8450

 

MUMBAI – The rupee fell against the greenback Monday as banks bought dollars on behalf of importers and oil marketing companies, dealers said. The domestic currency opened steady against the dollar but soon came under pressure as importers rushed in to take advantage of lower dollar/rupee levels, wary of further depreciation of the rupee, they said. 

 

"The month-end payment pressure is building up," a dealer at a state-owned bank said. "Many people were on leave last week on account of Diwali, so all that pending demand is seen in the market today (Monday)."

 

The dollar index fell slightly in early trade Monday due to expectations of a 25-basis-point rate cut by the Federal Reserve at its policy meeting on Oct. 28-29, which limited losses for the domestic currency. At 0925 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.91, down from 98.94 Friday and 98.92 Thursday. 

 

Dealers expect the Reserve Bank of India to pitch in through dollar says at around 88-a-dollar levels of the rupee, as has been the case for the past few days. For the rest of the day, the rupee is seen moving in a range of 87.70 and 88.10 against the greenback. Dealers peg immediate technical support for the rupee at 88.00.  (Rati Chaphekar)

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India Rupee - Asia FX: Most up as dollar index falls; S Korean won up 0.5%

 

MUMBAI – Most Asian currencies rose against the dollar Monday as the dollar index slipped due to heightened expectations of a rate cut by the Federal Reserve at its Oct. 28-29 meeting. Market participants keenly await the commentary after the Federal Open Market Committee's meeting for cues regarding the future trajectory of the Fed's interest rates. 

 

Data released Friday showed the US consumer price index rose 0.3% on month in September against a 0.4% increase forecast by economists polled by Reuters, after climbing 0.4% in August. Weaker-than-expected data has strengthened the chances of a 25-basis-point rate cut at the US Federal Reserve's October meeting.  

 

Markets have fully priced in a 25-bps rate cut at the meeting this week but will watch for guidance on the policy path beyond October amid expectations of further incremental cuts. Fed funds futures traders are now pricing in a 96.7% chance of the Fed cutting interest rates by 25 basis points this week, CME FedWatch showed. 

 

At 0905 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.91, down from 98.94 Friday and 98.92 Thursday. Tracking the fall in the dollar index, the South Korean won rose 0.5% against the greenback, the Malaysian ringgit rose 0.2%, and the Thai baht rose 0.1%. 

 

The Chinese yuan rose 0.1% against the greenback after US Treasury Secretary Scott Bessent said in an interview with CBS News that US President Donald Trump's proposed 100% tariffs on Chinese imports are "essentially off the table." He added that China is expected to make significant soybean purchases and to delay broad restrictions on rare earth exports. The US, however, will maintain its current export controls on China, Bessent said. The Taiwan dollar rose 0.2% against the dollar. 

 

Bucking the trend, the Indonesian rupiah fell 0.1% against the greenback, while the Philippine peso traded steady.  (Rati Chaphekar)

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India Rupee: Expected range for rupee - Oct 27

 

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	88.00	87.60
Private-sector bank	87.90	87.60
Private-sector bank	87.95	87.55
Brokerage firm	87.93	87.75

 

 

 

 

 

 

 

(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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