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Informist, Tuesday, May 5, 2026

 

By Pratiksha

 

NEW DELHI – The rupee fell sharply against the dollar and settled at a record closing low for the fourth consecutive trading day as fresh hostilities in West Asia dampened investors' risk appetite and pushed up crude oil prices, dealers said. However, losses for the Indian currency were limited as the Reserve Bank of India intervened through dollar sales actively during the day, they said. 

 

"RBI is clearly letting the rupee depreciate slowly and steadily," a dealer at a private-sector bank said. "It knows that rupee has to depreciate, so there's no point artificially holding it at a level."

 

After hitting a record low of 95.4350 a dollar during the day, the Indian unit settled at 95.2800 a dollar Tuesday, 0.2% lower than its previous close.

 

Crude oil prices jumped almost 6% Monday after a major escalation in tensions between the US and Iran. Both the countries launched fresh attacks in the Gulf on Monday as they contended for control over the Strait of Hormuz, jeopardising the fragile ceasefire.

 

Brent crude oil futures for July delivery were at $112.59 a barrel at 1530 IST, down from $114.44 a barrel Monday but up from $108.17 a barrel Friday. The Indian currency fell past its previous record low of 95.3325 a dollar shortly after opening and hit a fresh record low.  

 

However, the central bank marked its presence in the spot market shortly after it opened and ensured the Indian unit did not fall further, dealers said. The RBI likely sold dollars through state-owned banks around 95.40 a dollar for most part of the day, dealers said. However, the intervention was not aggressive in nature, they said.   

 

Banks bought dollars on behalf of oil marketing companies and other importers, fearing further fall of the rupee, dealers said. This further weighed on the Indian unit. The Indian unit has depreciated 0.4% against the dollar so far this week. 

 

"Market is very cautious right now because one can't avoid placing long (dollar) bets but can't risk going all in too," a dealer at a state-owned bank said. "Even if people don't buy, CAD (current account deficit) related buying will always be there."

 

Banks also bought dollars on behalf of foreign portfolio investors looking to exit Indian markets, dealers said. FPIs withdrew nearly $5.93 billion worth of funds from Indian markets last month. On Tuesday, the Nifty 50 and Sensex ended 0.4% and 0.3% lower, respectively. 

 

With no end in sight to the war in West Asia and the sustained depreciation of the rupee, market participants expect the central bank to come up with strong measures to mobilise dollar inflows to boost its foreign exchange reserves and support the Indian currency. "RBI will have to do something blockbuster to bring dollars. Just getting $20 billion-$30 billion won't help, they will have to do something bigger," a dealer at another private-sector bank said. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.2800	95.3100	95.2800	95.4350	95.0875
1-year dlr/rupee fwd (paise)	307.85	308.23	309.47	304.62	305.30

 

FORWARDS

The one-year dollar-rupee forward premium ended slightly higher Tuesday as the rupee's fall to a record low against the dollar prompted banks to buy the greenback for forward delivery on behalf of importers, fearing further fall, dealers said. However, the forward buys were not aggressive in nature, they said. 

 

A rise in US Treasury yields capped the gains for the forward premiums, dealers said. US Treasury yields rose to 4.45% Monday from 4.39% Friday. 

 

The one-year exact period dollar-rupee forward premium was 3.23% at 1530 IST, higher than Monday's close of 3.21%. On an absolute basis, the premium was 307.85 paise, against 305.300 paise Monday. 

 

OUTLOOK

On Wednesday, the rupee will continue tracking overnight movement in crude oil prices amid evolving developments related to the West Asia war, dealers said. The local unit will also take cues from movement in the dollar index, they said. 

 

"From here, everything is a trade on Hormuz. As long as those flows remain constrained, Brent can eventually push toward $125-$130, and that would open up 97.00-97.50 on USDINR, with 95.00 and 94.50 acting as major supports on any pullback," Anindya Banerjee, head of commodity and currency research at Kotak Securities, said in a note.

 

"The undervaluation will only start to correct - and the rupee will only meaningfully recover - once Brent eases back below $100 and capital flows turn supportive again. Until then, the path of least resistance for spot remains higher," he added. 

 

Dealers expect importers to continue buying dollars, fearing further rupee depreciation, which may weigh on the Indian currency. Persistent foreign portfolio outflows may also exert pressure on the Indian unit. 

 

Most dealers expect the RBI to intervene by selling dollars if the Indian unit comes under extreme pressure. However, they expect the central bank to keep a light touch in terms of intervention, as has been the case recently. 

 

Dealers now see strong technical support for the Indian currency at 95.50 per dollar. The rupee is likely to move in a range of 95.20-95.70 against the dollar Wednesday.

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India Rupee - World FX: Dollar index steady on uncertainty over W Asia war

 

	AT 1502 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3543	1.3551	1.3514	1.3535
EUR/USD	1.1688	1.1697	1.1677	1.1688
NZD/USD	0.5880	0.5884	0.5857	0.5871
AUD/USD	0.7159	0.7171	0.7136	0.7165
USD/JPY	157.4530	157.8930	157.0840	157.1300
USD/CAD	1.3618	1.3630	1.3612	1.3611
EUR/JPY	184.0530	184.4690	183.6632	183.7200
CHF/USD	1.2762	1.2775	1.2742	1.2743
EUR/CHF	0.9157	0.9170	0.9154	0.9164

 

MUMBAI – The dollar index was broadly steady as investors assessed developments related to the West Asia war with the ceasefire between the US and Iran under clouds of doubt after both the countries launched fresh attacks. Iran Monday attacked ships trying to cross the Strait of Hormuz as part of "Project Freedom." US President Donald Trump announced the project as part of US's effort to re-open the Strait of Hormuz.

 

Iran also attacked ports in the United Arab Emirates, with the Iranian army showing maps highlighting its extended control over the areas along the Strait. At 1434 IST, the dollar index was at 98.47, almost unchanged from its previous day's close.

 

The Australian dollar was down 0.1% against the dollar despite the Reserve Bank of Australia delivering its third consecutive interest-rate hike Tuesday. The central bank raised its official cash rate by 25 basis points to 4.35%, following increases in February and March.

 

The Japanese yen was marginally down against the dollar. Traders are closely monitoring the yen for any intervention by the Bank of Japan in the foreign exchange market to support the currency, after likely intervention last week.

 

Both the euro and the British pound sterling weakened against the dollar as investors sought the greenback amid flaring up of the situation in West Asia. At 1446 IST, both the euro and British pound were down 0.1?ch against the dollar. The Canadian dollar was also down 0.1% against the dollar.

 

The Swiss franc gained against the dollar after data showed inflation in April rose 0.6% on year after rising 0.3% in March. (Suryash Kumar)

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India Rupee: Forward premium slightly up as importers buy forward dollars

 

 

	AT 1346 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.3775	95.3100	95.3100	95.4350	95.0875
1-year dlr/rupee fwd (paise)	308.350	308.233	309.466	304.616	305.300

 

MUMBAI – The one-year dollar-rupee forward premium rose slightly Tuesday as the rupee's fall to record low against the dollar prompted banks to buy dollars for forward delivery on behalf of importers, fearing further fall, dealers said. However, the forward buys were not aggressive in nature, they said. 

 

"Rupee is weak in the spot, so forwards is getting paid," said a dealer at a private bank. The rupee fell to a record low of 95.4350 a dollar Tuesday as fresh tensions in West Asia pushed crude prices higher, dealers said. The Indian currency has depreciated over 0.3% against the dollar so far Tuesday. 

 

A rise in US Treasury yields limited gains for the forward premiums, dealers said. US Treasury yields rose to 4.45% Monday from 4.39% Friday. 

 

The one-year exact period dollar-rupee forward premium was 3.23% at 1346 IST, higher than Monday's close of 3.21%. On an absolute basis, the premium was 308.35 paise, against 305.300 paise Monday. (Suryash Kumar)

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India Rupee: Remains sharply down; RBI, exporters' dollar sales limit fall

 

	AT 1325 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.4075	95.3100	95.3100	95.4100	95.0875

 

The rupee remained sharply down against the dollar, hovering near its record low of 95.4025 a dollar, amid renewed hostilities in West Asia and high crude oil prices, dealers said. However, state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, which prevented further slide of the rupee, they said.

 

The RBI likely sold dollars around 95.40 a dollar, they said. Noting the central bank's intervention, some banks also sold dollars on behalf of exporters, they said. 

 

"Public sector banks are on offers but small public sector banks are in bid. As of now 95.40 is getting protected (by the RBI)," said a dealer at a private bank.

 

Crude oil prices rose nearly 6% Monday, with Brent crude oil July contract trading at $113.11 per barrel at 1324 IST. Tensions flared up in West Asia after Iran attacked ships trying to cross the Strait of Hormuz as the US navy started escorting ships through the Strait.

 

For the rest of the day, the rupee is seen moving in the range of 95.20-95.50. Dealers see strong technical support for the rupee at 95.50 a dollar. (Suryash Kumar)

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India Rupee: Technical levels for rupee - May 5

 

MUMBAI – At 1108 IST, the rupee was at 95.3850 a dollar. At 0900 IST, the rupee was at 95.3100 a dollar, against the previous close of 95.0875. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

 

Participants	S2	S1	R1	R2
Private bank	95.60	95.50	95.25	95.15
Private bank	95.55	95.40	95.24	95.10
Brokerage firm	95.50	-	94.75	94.50
Brokerage firm	95.50	-	94.20	93.80

 

(Pratiksha and Suryash Kumar)

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India Rupee: Sharply dn on firm crude prices, escalating tensions in W Asia

 

	AT 0945 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.3500	95.3100	95.3100	95.4025	95.0875

 

MUMBAI – The rupee fell sharply against the dollar Tuesday as crude oil prices rose nearly 6% on Monday crossing the $114 per barrel mark. At 0937 IST, Brent crude oil futures for July delivery traded at $113.24 per barrel. Crude prices rose as the situation in West Asia flared up, with Iran attacking ships trying to cross the Strait of Hormuz. Iran also attacked ports in the United Arab Emirates since it viewed the US navy attempting to reopen the Strait of Hormuz as a violation of the ceasefire. 

 

Investors' risk appetite dampened amid growing tension in West Asia, strengthening the dollar against other currencies. The downward pressure on the rupee is likely to continue as high crude oil prices will worsen the current account deficit situation for India.

 

"Due to renewed tension between US and Iran, oil prices have risen, and it's a negative CAD (current account deficit) position for India, hence the rupee is weakening," a dealer at a private bank said. Dealers also expect strong demand for dollars by importers to continue while foreign portfolio outflows from the Indian markets will also add to the downward pressure on the rupee. 

 

For the rest of the day, the rupee is seen moving in the range of 95.20-95.50. (Suryash Kumar)

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India Rupee: Expected range for rupee - May 5

 

NEW DELHI – Following are the support and resistance levels expected for the rupee Tuesday, as forecast by leading banks and brokerages in an Informist Poll:

 

PARTICIPANT	SUPPORT	RESISTANCE
Private-sector bank	95.35	95.15
Private-sector bank	95.50	94.80
Private-sector bank	95.40	95.00
Foreign bank	95.40	94.80
Brokerage firm	95.25	94.75
Brokerage firm	95.45	95.05

 

 

 

 

 

 

 

 

 

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India Rupee - Asia FX: Most down as West Asia flare-up dampens risk appetite

 

MUMBAI – Most Asian currencies fell against the dollar Tuesday as renewed hostilities in West Asia dampened investors' risk sentiment and shot up crude oil prices. Iran Monday attacked ships trying to cross the Strait of Hormuz and ports in the United Arab Emirates as the US attempted to reopen the Strait of Hormuz.

 

US President Donald Trump Sunday said that the US as part of "Project Freedom" will help stranded ships to exit the Strait of Hormuz. However, as the US navy attempted to escort ships through the Strait, Iran attacked the vessels, sending a message to the US that it still has control over the Strait. The US military said it sank six Iranian small boats that tried to block the passage of ships through the Strait. 

 

Brent crude oil prices jumped almost 6% Monday, weighing on oil-sensitive currencies like the Philippine peso, which fell 0.2% against the dollar. Brent crude oil futures for July delivery were at $113.29 a barrel at 0840 IST, down from $114.44 a barrel Monday but up from $108.17 a barrel Friday. 

 

The dollar index strengthened as rising crude oil prices and the recent flare-up in the West Asia region boosted the safe-haven currency's demand. The dollar index traded at 98.48 at 0840 IST, unchanged from previous day but up from 98.21 Friday.

 

The Indonesia rupiah weakened 0.1% against the dollar while the Thai baht fell 0.1%. The Malaysian ringgit fell 0.3% against the dollar. Market participants await the policy decision by Bank Negara Malaysia on Thursday. The central bank is expected to maintain the overnight policy rate at 2.75%. This would mark the sixth consecutive meeting where the bank has chosen to hold. 

 

Bucking the trend, the South Korean won and the Chinese yuan were up 0.3% and 0.2% against the dollar, respectively. The Taiwan dollar was flat against the US unit. (Suryash Kumar)

 

End

 

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

 

Edited by Tanima Banerjee

 

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