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Informist, Monday, May 11, 2026

 

By Pratiksha

 

NEW DELHI – The rupee posted its worst single-day fall in over six weeks against the dollar and settled at a record closing low Monday after US President Donald Trump rejected Iran's response to a peace proposal, sending oil prices higher and stoking fear that ‌the war in West Asia will drag on, dealers said. Prime Minister Narendra Modi's comments Sunday, urging citizens to conserve foreign exchange, also unnerved currency traders and weighed on the Indian unit. 

 

"The market was heavily on bid (dollar buying) throughout the day. There was support here and there, but all dips (in dollar-rupee) were bought," a dealer at a private-sector bank said. "PM's comments have only added to that buying."

 

The Indian currency settled at 95.3100 a dollar Monday, almost 0.9% lower than its previous close. The Indian unit posted its biggest one-day fall since Mar. 27.

Monday, the rupee was the worst-performing currency among its Asian peers. The other Asian currencies fell 0.1-0.8% against the dollar Monday. 

 

Brent crude prices surged after hopes for an imminent end to the war in West Asia, which would allow oil transit through the Strait of Hormuz, came crashing down after US President Donald Trump on Sunday dismissed the Iranian response to a US proposal for peace talks as "unacceptable". Trump posted on social media: "I have just read the response from Iran's so-called 'Representatives.' I don't like it - TOTALLY UNACCEPTABLE."

 

Brent crude oil futures for July delivery were at $104.10 a barrel at 1530 IST, up from $101.29 a barrel Friday and $100.06 a barrel Thursday. It rose to 105.99 a barrel during the day.

 

On Sunday, Modi urged citizens to cut down on petrol and diesel use amid the ongoing energy crisis stemming from the war in West Asia. He also urged people to reduce international travel and called for greater reliance on public transport to cut petrol and diesel use. His comments spooked currency traders, heightening concerns about the adequacy of India's foreign exchange reserves to keep the rupee stable. India's foreign exchange reserves were at $690.69 billion as of May 1, almost $38 billion lower than the record high just before the war started. 

 

"The speech has raised concerns about the pressure of a higher import bill on India's economy and currency stability, especially with elevated crude prices continuing to strain the external balance," said Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "While the government's message was aimed at promoting long-term self-reliance and reducing unnecessary imports, the immediate market reaction remained cautious, which weighed on sentiment in the currency market."

Following Modi's comments, expectations of an announcement by the government or the Reserve Bank of India regarding measures to spur foreign inflows into India and support the rupee have increased. Bloomberg last week reported that the RBI was considering a plan for state-owned lenders to issue foreign-currency bonds to attract capital inflows and support the rupee. However, a government official told Informist Monday that the government currently has no plan to raise the import duty on gold and silver to discourage unnecessary imports.

 

Banks persistently bought dollars on behalf of importers, particularly oil marketing companies, fearing further fall of the rupee, dealers said. A sharp fall in domestic equities also exerted pressure on the local currency, they said. The Nifty 50 and Sensex ended 1.5% and 1.7% lower, respectively, Monday. 

 

However, losses for the Indian unit were limited as state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, dealers said. The RBI likely sold dollars at multiple levels, but the intervention was not aggressive, they said. "Nobody is expecting RBI to heavily intervene," a dealer at a state-owned bank said. "The current issue can't be solved by just using FX reserves."

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.3100	94.9500	94.9500	95.3200	94.4800
1-year dlr/rupee fwd (paise)	301.43	298.88	302.43	298.28	290.70

 

FORWARDS

The one-year dollar-rupee forward premium ended higher for the second consecutive trading day Monday as banks persistently bought dollars on behalf of importers, fearing further fall of the rupee, dealers said. Importers also bought forward dollars, noting the relatively lower forward levels, dealers said. The one-year forward premium has fallen over 20 basis points so far this month. 

 

"We are, of course, seeing heavy paying in forwards too," a dealer at another private-sector bank said. "Mostly in the near-to-mid buckets, importers are active."

 

The one-year exact period dollar-rupee forward premium was 3.17% at 1530 IST, up from Friday's close of 3.08%. On an absolute basis, the premium was 301.43 paise, against 290.70 paise Friday.

 

OUTLOOK

The rupee will continue to take cues from crude oil price movement Tuesday amid evolving developments related to the war in West Asia and the peace agreement between the US and Iran, dealers said. If crude prices continue to rise, market participants expect the rupee to hit a record low Tuesday. The rupee fell to a record low of 95.4350 last week.

 

The local unit will also take cues from movements in the dollar index. Market participants expect importers to continue buying dollars, fearing rupee depreciation amid uncertainty over the situation in West Asia, which may weigh on the Indian currency. 

 

However, most dealers expect the RBI to intervene by selling dollars if the Indian unit comes under pressure. But they don't expect the central bank to intervene aggressively. 

 

Market participants will also look out for any announcement by the central bank to spur foreign inflows into India and support the rupee. "Modi's comments have signalled a sense of desperation in authorities now. So, it is pretty much certain that they will take some measures to deal with the current situation," a dealer at a foreign bank said. 

 

Dealers now see strong technical support for the Indian currency at 95.40 per dollar. The rupee is likely to move in a range of 95.00-95.50 against the dollar Tuesday. 

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India Rupee - World FX: Dlr index steady on US-Iran peace deal uncertainty

 

	AT 1533 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3594	1.3615	1.3552	1.3633
EUR/USD	1.1765	1.1792	1.1747	1.1792
NZD/USD	0.5943	0.5957	0.5939	0.5964
AUD/USD	0.7236	0.7250	0.7214	0.7249
USD/JPY	157.1450	157.1730	156.6650	156.6570
USD/CAD	1.3669	1.3694	1.3660	1.3668
EUR/JPY	184.8860	185.0200	184.0300	184.7406
CHF/USD	1.2837	1.2865	1.2828	1.2871
EUR/CHF	0.9164	0.9168	0.9146	0.9159

 

MUMBAI – The dollar index was broadly steady after giving up some early gains during the European trading session amid uncertainty related to peace negotiations between the US and Iran after US President Donald Trump rejected Iran's response to Washington's peace proposal. Investors also await US inflation data for April, which will be released Tuesday. 

 

The dollar index was at 97.98 Monday, against 97.84 Friday and 98.26 Thursday. US President Trump said in a post on Truth Social, "I have just read the response from Iran's so-called "Representatives." I don't like it — TOTALLY UNACCEPTABLE!"

 

Adding to the dollar's strength was strong US job data, which was released on Friday. The unemployment rate was unchanged at 4.3%, while the US added 115,000 non-farm jobs in April, surpassing the consensus estimate of 65,000.

 

The Swedish Krona fell 0.5% against the US dollar. The Canadian dollar followed with a decline of 0.3% against the greenback. The British pound was down 0.2% against the dollar as investors digested last week's local election results that showed Prime Minister Keir Starmer's hold on the Labour Party was slipping.

 

The yen was down 0.3% against the dollar and the euro was down 0.1%. Growing expectations that the European Central Bank could hike interest rates in June are limiting the euro's weakness against the dollar. European Central Bank's outgoing Vice President Luis de Guindos urged to be prudent when deciding on an expected interest rate hike next month as growth was set to weaken, as per reports.(Suryash Kumar)

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India Rupee: Premium up as rupee's slump prompts fwd dlr buys by importers

 

	AT 1345 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.2300	94.9500	94.9500	95.2750	94.4800
1-year dlr/rupee fwd (paise)	299.43	298.88	303.87	296.43	290.70

 

 

MUMBAI – The one-year dollar-rupee forward premium rose Monday, continuing the upward trend from Friday, as banks persistently bought dollars on behalf of importers, who fear further fall of the rupee, dealers said. 

 

"Crude oil prices have not moved beyond $108 per barrel mark...hence, gain in premium will be limited. However, there is an inclination towards buying in the forward market," a dealer at a private-sector bank said.

 

The rupee fell almost 0.8% against the dollar Monday as crude prices rose amid the uncertainty related to the peace deal between the US and Iran after US President Donald Trump Sunday said Iran's response to US' peace proposal was unacceptable.

 

Importers also bought forward dollars, noting the relatively lower forward levels, dealers said. The one-year forward premium has fallen over 20 basis points so far this month. "Importers, especially oil importers, expect the premiums to further rise. So they are buying at the current level," said another dealer at a private-sector bank. 

 

The one-year exact period dollar-rupee forward premium was 3.15% at 1345 IST, up from Friday's close of 3.08%. On an absolute basis, the premium was 299.43 paise, against 290.700 paise Friday. (Suryash Kumar)

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India Rupee: Remains sharply down as crude prices up, importers buy dollars

 

	AT 1202 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.1375	94.9500	94.9500	95.2225	94.4800

 

MUMBAI – The rupee remained sharply lower against the dollar owing to rising Brent crude oil prices and heavy demand for dollars on behalf of importers, dealers said. Crude prices rose after US President Donald Trump rejected Iran's response to US' peace proposal, calling it unacceptable.

 

"I have just read the response from Iran's so-called 'Representatives'. I don't like it — TOTALLY UNACCEPTABLE!" Trump said on Truth Social. Brent crude oil prices for July delivery were up over 4% at $105.49 per barrel at 1230 IST.

 

Dealers said heavy demand for the greenback by banks on behalf of importers, especially from oil importers, has further added to the depreciating pressure on the rupee. Dealers expect the Indian unit to fall further during the day as crude prices continue to climb.  

 

"The rupee may reach 95.4450 a dollar mark today (Monday) as it has fallen beyond 95.20 mark," a dealer at a state-owned bank said. "Some selling (of dollars) is expected if it reaches 95.40-95.44 mark." The rupee hit a low of 95.2225 a dollar during the day. 

 

A rise in the dollar index owing to its increased safe-haven appeal to investors amid the uncertainty related to the war in West Asia, which also weighed on the rupee, dealers said. An over 1?cline in domestic equities also weighed on the currency, they said.

 

Meanwhile, state-owned banks sold dollars, likely on behalf of the Reserve Bank of India around 95.22 a dollar, which limited losses for the Indian unit, dealers said. However, the intervention was not aggressive in nature, they said. For the rest of the day, the rupee is seen moving in the range of 94.70-95.30. (Suryash Kumar)

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India Rupee: Technical levels for rupee - May 11

 

MUMBAI – At 1100 IST, the rupee was at 95.1800 a dollar. At 0900 IST, the rupee was at 94.9500 a dollar, against the previous close of 94.4800. 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	95.35	95.20	95.00	94.70
Private-sector bank	-	95.20	94.00	93.70
Brokerage firm	-	95.30	94.50	93.75
Brokerage firm	95.50	95.30	93.80	93.50

 

(Suryash Kumar)

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India Rupee: Slumps as oil up after Trump calls Iran's offer unacceptable

 

	AT 1010 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.1500	94.9500	94.9500	95.1600	94.4800

 

MUMBAI – The rupee fell sharply below the key 95-per-dollar mark Monday as crude prices rose after peace talks between the US and Iran hit an impasse following US President Donald Trump's comment that Iran's response to the US peace proposal was unacceptable, dealers said. 

 

Iran "has been playing games with the United States, and the rest of the World, for 47 years. They will be laughing no longer!", Trump said on Truth Social. Two hours later, he said on the same platform, "I have just read the response from Iran's so-called ‘Representatives'. I don't like it — TOTALLY UNACCEPTABLE!"

 

Brent crude prices for July delivery were up over 4% at $105.71 per barrel at 0940 IST. "The rupee will be around the 95 mark as the situation in West Asia worsens," a dealer at a state-owned bank said. 

 

Banks bought dollars on behalf of importers, fearing a further fall of the rupee, which further added to the downward pressure on the rupee. However, market participants expect the Reserve Bank of India to step in through dollar sales to support the rupee. In fact, some dealers speculated that the central bank may have intervened shortly after spot opening to support the Indian unit. 

 

"Buying (of dollars) is happening at the current levels. If the buyers come in aggressively, there might be some intervention by the Reserve Bank of India to protect levels," said the dealer. Prime Minister Narendra Modi Sunday urged people to cut down on the use of petrol and diesel as India finds itself in an increasingly tough spot amid the ongoing energy crises stemming from the war in West Asia. 

 

For the rest of the day, the rupee is seen moving in the range of 94.70-95.30. Dealers see immediate technical support for the rupee at 95.30 a dollar. (Suryash Kumar)

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India Rupee: Expected range for rupee - May 11

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Public-sector bank	95.00	94.50
Private-sector bank	94.80	94.00
Foreign bank	94.90	94.50
Foreign bank	95.00	94.40
Brokerage firm	94.98	94.42
Brokerage firm	94.80	94.25

 

 

 

 

 

 

 

 

 

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India Rupee - Asia FX: Most down as crude up on US-Iran peace deal deadlock

 

MUMBAI – Most Asian currencies weakened against the dollar as investors were less optimistic about a peace deal after US President Donald Trump said Iran's response to the US proposal was unacceptable.

 

Iran "has been playing games with the United States, and the rest of the World, for 47 years. They will be laughing no longer!", Trump said on Truth Social. Two hours later, he said on the same platform, "I have just read the response from Iran's so-called ‘Representatives'. I don't like it — TOTALLY UNACCEPTABLE!"

 

The South Korean won was down 0.7% against the dollar, the most among its Asian peers. The Thai Baht and the Philippine peso were down 0.6% against the dollar. 

 

Most Asian economies are highly dependent on imports to meet their energy needs. As a result, high crude oil prices are likely to drive up their import bills and worsen their current account deficit or limit their current account surplus. The Brent crude oil for delivery in July rose over 3% on Monday, trading at $104.68 per barrel at 0810 IST.

 

As energy-related disruptions linger, rising risks of fuel shortages could pose a more differentiated challenge for regional FX, particularly for economies with relatively low crude inventory buffers, Lloyd Chan, senior currency analyst, MUFG Bank, said in a note. "This includes India and several ASEAN markets such as the Philippines, Vietnam, and Indonesia, although we acknowledge ongoing efforts across the region to secure alternative supply from non-Middle East producers," he added.

 

The Malaysian ringgit was down 0.1% against the dollar while the Indonesian rupiah was down 0.2%. Bucking the trend was the Chinese Yuan, which was up almost 0.1% against the dollar. Data Monday showed China's consumer and producer inflation jumped more than expected in April as the West Asia war drove commodity costs higher. Consumer prices rose 1.2% on year in April, beating estimates of 0.9% in a Reuters poll, and accelerating from a 1% rise in March. The producer price index jumped 2.8% from a year ago, surpassing the forecast of 1.6% and the 0.5% rebound in the prior month. (Suryash Kumar)

 

End

 

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

 

Edited by Saji George Titus

 

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