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Informist, Friday, Oct. 31, 2025

 

By Rati Chaphekar

MUMBAI - The rupee ended at an over two-week low against the dollar Friday as banks persistently bought dollars on behalf of oil marketing companies and other importers, delaers said. However, the Reserve Bank of India's active intervention through dollar sales ensured the Indian currency did not fall to a lifetime low, they said.

 

"88.80 was protected again by RBI," a dealer at a state-owned bank said. "It seems like rupee will be in the same range as before, with RBI being on guard. Unless 88.80 breaks, there is nothing new in the market."

 

After trading in a range of 20 paise during the day, the domestic currency ended the day at 88.7650 a dollar, not too far away from its record low of 88.8025. The Indian curency had settled at 88.6950 on Thursday.

 

Other Asian currencies rose 0.1-0.3% against the dollar, with the South Korean won gaining the most. The Indian rupee emerged as the worst performer among its peers, with a fall of 0.1%.

 

The Indian unit opened higher against the dollar, tracking gains in other Asian currencies. Moreover, some foreign banks sold dollars for foreign fund inflows into Indian markets. The Indian unit rose to a high of 88.5800 a dollar. "There were foreign inflows since yesterday (Thursday)," a dealer at a private-sector bank said. "But the high rupee level was very unlikely, that's why a lot of buying (for dollars) came in immediately after opening."

 

The rupee soon erased all its early gains as some banks rushed in buy dollars on behalf of oil and other importers, in order to take advantage of the relatively lower dollar-rupee levels, dealers said. Importers were wary of further depreciation in the Indian currency after it posted its biggest one-day fall in two months on Thursday, they said.

 

However, some state-owned banks stepped in to sell dollars, likely on behalf of the RBI, which prevented the Indian currency from hitting a record low, dealers said. The rupee fell to a low of 88.7800 during the day. The apex bank likely sold around $1 billion in the market Friday, as per some dealers. 

 

The dollar index rose in European trade, exerting further pressure on the Indian unit, dealers said. On Thursday, the dollar index hit a three-month high as US Federal Reserve Chair Jerome Powell's comments pushed back against expectations of another rate cut at the US central bank's December meeting. "In the committee's discussions at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it," Powell said.

 

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.51, down from 99.53 Thursday but up from 99.14 Wednesday. The index had risen to 99.72 on Thursday, its highest level since Aug. 1.

 

The Indian unit was also weighed by a fall in domestic equities, according to dealers. Friday, both the Nifty 50 and the Sensex ended 0.6% lower.

 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.7650	88.5900	88.5800	88.7800	88.6950
1-year dlr/rupee fwd (paise)	192.83	196.83	196.83	190.92	195.63

 

FORWARDS

Dollar-rupee forward premiums ended lower across tenures, with the one-year contract hitting a 10-week low, due to the RBI likely selling dollars for long-tenure forward delivery and a rise in US Treasury yields, dealers said. 

 

The RBI likely sold forward dollars for maturity in January 2027 to neutralise its spot interventions and avert pushing out rupee liquidity, dealers said. Since the RBI's spot dollar sales push out rupee liquidity from the banking system, it 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. 

 

US Treasury yields rose as US Federal Reserve Chair Jerome Powell Wednesday cast doubt on another rate cut at the central bank's next policy meeting in December. Forwards of a currency pair are reflective of the interest rate differential between the two countries. The 10-year US bond yield rose to 4.11% Thursday from 4.08% Wednesday. 

 

Fed funds futures traders are now pricing in a 64% chance of the Fed cutting interest rates by 25 bps in December, the CME FedWatch tool showed. At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.17%, against the previous close of 2.22%. On an absolute basis, the premium was 192.83 paise, against 195.63 paise Thursday. 

 

OUTLOOK

On Monday, the rupee will take cues from movement in the dollar index and other Asian currencies, dealers said. Traders expect the RBI to continue intervening through dollar sales to prevent the Indian unit from hitting a record low. 

 

Market participants will also watch out for any development on the India-US trade deal negotiations. "There are no cues except the trade deal (US-India) in near future," a dealer at a private-sector bank said. "I think rupee will trade around 88.80 next week, but at the end, no one knows what is in RBI's mind." 

 

Dealers also expect importers to continue buying dollars, wary of further depreciation in the rupee, which would exert pressure on the local unit. The rupee is expected to move in a range of 88.40 to 88.80 against the dollar Monday. Immediate technical support for the rupee is pegged at 88.80 per dollar. 

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India Rupee - World FX: Euro steady as ECB keeps policy rate unch; yen down

 

	AT 1430 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3145	1.3165	1.3125	1.3147
EUR/USD	1.1567	1.1578	1.1555	1.1566
NZD/USD	0.5719	0.5745	0.5714	0.5737
AUD/USD	0.6541	0.6560	0.6534	0.6552
USD/JPY	154.3150	154.4120	153.6570	154.0840
USD/CAD	1.3997	1.4011	1.3980	1.3982
EUR/JPY	178.5040	178.5630	177.8380	178.1940
CHF/USD	1.2461	1.2486	1.2449	1.2458
EUR/CHF	0.9281	0.9286	0.9270	0.9268

 

India Rupee - World FX: Euro steady as ECB keeps policy rate unchanged; yen down

 

MUMBAI – The euro was steady against the greenback Friday after the European Central Bank kept interest rates unchanged at 2% for the third meeting in a row Thursday. The central bank reiterated that policy was in a "good place" as economic risks recede and the eurozone shows continued resilience amid uncertainty. The ECB has held the policy rate steady after cutting it by a total of 200 basis points this year until June.

 

Meanwhile, data Thursday showed Germany's GDP growth stagnated in the September quarter, highlighting the struggle Europe's biggest economy faces in regaining momentum as exports dwindle. The GDP stagnation was in line with forecasts, after Germany's economy shrank 0.3% in the June quarter as weak global demand and US import tariffs weighed on exports.

 

The Japanese yen fell 0.1% against the greenback even after Minister of Finance Satsuki Katayama Friday said the government has been monitoring foreign exchange movements "with a high sense of urgency", her strongest comment on currency since assuming the role last week. "We have been recently seeing one-sided, rapid moves," Katayama said. "The government has been monitoring, with a high sense of urgency, excessive fluctuations and disorderly movements on the currency market, including those driven by speculators."

 

The Japanese central bank Thursday kept interest rates steady at 0.5%, as expected, but Governor Kazuo Ueda said the likelihood of its baseline scenario materialising has heightened--language he had used in the past to signal that a rate hike was imminent. Meanwhile, data Friday showed consumer prices in Tokyo rose more than expected in October, which saw increased bets on a rate hike by the central bank. Core CPI rose 2.8% on year, against an estimate of 2.6% in a Reuters poll.

 

The Australian dollar fell 0.2% against the greenback ahead of the Reserve Bank of Australia's Monetary Policy Committee meeting decision Tuesday. The central bank is expected to keep the key policy rate unchanged at 3.60%.   

 

The New Zealand dollar fell 0.4% against the dollar after Prasanna Gai, a member of the Reserve Bank of New Zealand's rate-setting committee, said US tariffs have acted as a negative demand shock for a small open economy like New Zealand's. He added that these shocks appear to have offset some of the monetary easing that has taken place since 2024.

 

The dollar index rose in European trade, continuing its upward trend from Thursday, as US Federal Reserve Chair Jerome Powell's comments pushed back against expectations of another rate cut at the US central bank's December meeting. Tracking the rise in the dollar index, the pound sterling and the Swiss franc fell 0.1% against the greenback. At 1430 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.55, up from 99.53 Thursday and 99.14 Wednesday.  (Rati Chaphekar)

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India Rupee: Premiums fall as RBI likely sells forward dollars, US yields rise

 

	AT 1325 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.7450	88.5900	88.5800	88.7700	88.6950
1-year dlr/rupee fwd (paise)	192.29	196.83	196.83	192.429	195.63

 

NEW DELHI – Dollar-rupee forward premiums fell across tenures, with the one-year contract hitting an over three-week low, due to the Reserve Bank of India likely selling dollars for long-tenure forward delivery and a rise in US Treasury yields, dealers said. "Seems like the downward trend for forwards will continue for now," a dealer at a state-owned bank said. "The uncertainty on US rate cuts is there, so (US) yields may stay elevated. RBI is also expected to continue protecting 89 (a dollar) for now."

 

The RBI likely sold forward dollars for maturity in January 2027, to neutralise its spot interventions and avert pushing out rupee liquidity, dealers said. On Friday, the central bank likely sold dollars in the spot market to prevent the rupee from hitting a record low, dealers said. 

 

Since the RBI's spot dollar sales push out rupee liquidity from the banking system, it 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. 

 

US Treasury yields rose as Federal Reserve Chair Jerome Powell Wednesday cast doubt on another rate cut at the central bank's next policy meeting in December. Forwards of a currency pair are reflective of the interest rate differential between the two countries. The 10-year US bond yield rose to 4.11% Thursday from 4.08% Wednesday. 

 

Fed funds futures traders are now pricing in a 64% chance of the Fed cutting interest rates by 25 bps in December, the CME FedWatch tool showed. At 1325 IST, the one-year exact period dollar/rupee forward premium was 2.17%, against the previous close of 2.22%. On an absolute basis, the premium was 192.29 paise, against 195.63 paise Thursday.  (Pratiksha)

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India Rupee: Erases early gains as importers buy dollars; RBI averts record low

 

	AT 1240 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.7525	88.5900	88.5800	88.7475	88.6950

 

MUMBAI – The rupee erased all its early gains and fell against the dollar as banks persistently bought dollars on behalf of oil marketing companies and other importers, who wanted to make the most of relatively lower dollar/rupee levels, dealers said. The Indian currency rose to 88.5800 a dollar in early trade. 

 

However, some state-owned banks stepped in to sell dollars, likely on behalf of the Reserve Bank of India, which limited losses for the Indian unit, they said. The central bank likely sold dollars to prevent the Indian currency from hitting a record low, dealers said. The rupee fell to a low of 88.7700 during the day, not too far from its lifetime low of 88.8025. 

 

"We are back to the similar situation before Oct. 15," a dealer at a private-sector bank said. "The RBI is actively protecting the same level as yesterday (Thursday), 88.75 (a dollar)." The central bank had actively tried to protect the Indian unit from falling past 88.80 a dollar before ramping up its support drastically on Oct. 15, which led to the rupee posting its biggest one-day gain in over 16 weeks. 

 

Earlier in the day, some banks sold dollars, likely for foreign fund inflows into Indian markets, which supported the local unit, dealers said. A rise in other Asian currencies also boosted the local currency, they said.

 

For the rest of the day, the rupee is seen moving in a range of 88.50 and 88.80 against the greenback. Dealers peg immediate technical support for the rupee at 88.80 a dollar.  (Rati Chaphekar)

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India Rupee: Technical levels for rupee - Oct 31

 

NEW DELHI – At 1128 IST, the rupee was at 88.7075 per dollar. At 0900 IST, the rupee was at 88.5900 a dollar, against the previous close of 88.6950 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
Public-sector bank	89.00	88.80	88.20	88.00
Private-sector bank	88.90	88.80	87.70	87.60
Brokerage firm	89.00	88.80	88.20	88.15
Brokerage firm	89.00	88.81	88.50	88.20

 

(Pratiksha)

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India Rupee: Rises on dollar sales for FX inflows, gains in Asian currencies

 

	AT 0950 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.6200	88.5800	88.5800	88.6625	88.6950

 

MUMBAI – The rupee rose against the dollar as some banks sold dollars, likely for foreign fund inflows into Indian markets, dealers said. A rise in other Asian currencies also boosted the local unit, they said. 

 

Most Asian currencies gained against the dollar as the dollar index came off slightly from the three-month-high it hit Thursday. The dollar index jumped after US Federal Reserve Chair Jerome Powell's comments pushed back against expectations of another rate cut at the US central bank's December meeting. Most Asian currencies rose 0.1-0.2% against the dollar, with the Thai baht gaining the most. 

 

At 0955 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.49, down from 99.53 Thursday but up from 99.14 Wednesday. The index had risen to 99.72 on Thursday, its highest level since Aug. 1.

 

Meanwhile, some banks rushed in to buy dollars on behalf of importers and oil marketing companies, wary of further depreciation in the Indian currency after it slumped Thursday, dealers said. The rupee logged its worst single-day fall in two months on Thursday. 

 

"The rupee is likely to test 88.80 (a dollar) later in the day," a dealer at a state-owned bank said. "There is a lot of buying (of dollars) pressure that can push the rupee downwards, but nationalised banks (RBI) won't let it fall below 88.80."

 

For the rest of the day, the rupee is seen moving in a range of 88.40 and 88.80 against the greenback. Dealers peg immediate technical resistance for the rupee at 88.30.  (Rati Chaphekar)

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India Rupee - Asia FX: Most units up on dollar index fall, US-China trade truce

 

MUMBAI – Most Asian currencies rose against the dollar Friday as the dollar index slightly came off its three-month high and as market participants assessed the US-China trade truce. The dollar index rose after US Federal Reserve Chair Jerome Powell's comments Wednesday dampened expectations of another interest rate cut by the central bank in December. 

 

At 0915 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.50, down from 99.53 Thursday but up from 99.14 Wednesday. The index had risen to 99.72 on Thursday, its highest level since Aug. 1.

 

Tracking the slight fall in the dollar index, the Philippine peso, Indonesian rupiah, and Malaysian ringgit rose 0.1% against the greenback. Both the South Korean won and the Thai baht rose 0.2%. 

 

The Chinese yuan traded steady against the greenback. US President Donald Trump and his Chinese counterpart Xi Jinping did not sign a trade deal but agreed to a one-year extension of the US-China trade truce. Trump agreed to lower tariffs on China to 47% from 57%, and fentanyl tariffs on Chinese goods to 10% from 20%. China agreed to crack down on illicit fentanyl trade, pause tightening of export controls on rare earth minerals, and resume purchases of US soybeans. 

 

Further, data early Friday showed China's factory activity shrank for the seventh month in October. The purchasing managers' index fell to 49.0 in October from 49.8 in September. It remained below the 50-mark separating growth from contraction, and missed a median forecast of 49.6 in a Reuters poll. On the other hand, China's non-manufacturing activity returned to expansion in October, data showed. The non-manufacturing purchasing managers' index, which includes services and construction, rose to 50.1 from 50.0 in September.

 

The Taiwan dollar fell 0.1% against the greenback after minutes from the central bank's latest board meeting Thursday showed that the bank held the key interest rates steady in September, citing strong economic growth in the tech and AI sectors, while raising concerns about the impact of tariffs on the island's export economy.  (Rati Chaphekar)

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India Rupee: Expected range for rupee - Oct 31

 

MUMBAI – Following are the expected support and resistance levels for the rupee on Friday, as forecast by leading banks and brokerages in an Informist poll: 

 

PARTICIPANT	SUPPORT	RESISTANCE
State-owned bank	88.80	88.50
Private-sector bank	88.80	88.30
Private-sector bank	88.80	88.45
Brokerage firm	89.00	88.40
Brokerage firm	88.80	88.40
Brokerage firm	88.75	88.47

 

 

 

 

 

 

 

 

 

 

(Rati Chaphekar)

 

End

 

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

 

Edited by Vandana Hingorani

 

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