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Informist, Tuesday, May 19, 2026

 

By Divya Moolayattil

 

MUMBAI – The rupee fell sharply against the dollar and settled at a record closing low Tuesday as crude oil prices remained higher amid the uncertainty around the peace negotiations between the US and Iran. President Donald Trump said the US had paused attacks on Iran scheduled for Tuesday on a request from its allies in the Persian Gulf region, but he also threatened that US forces would attack Iran on a large scale if Tehran does not come up with an acceptable deal soon.

 

"It has been almost 12 weeks since the war started and there is no end. The oil inflow is disrupted, FPI (foreign portfolio investor) inflows are also not there. If this situation continues, the rupee will soon touch 97 this week," a dealer at a private-sector bank said.

 

The rupee closed at 96.5325 after falling to a record low of 96.6100, 0.2% lower than the previous close. The rupee moved in a range of 25 paise during the day. The Indian unit has fallen over 2% in the last eight days. Other Asian currencies were 0.1-0.3% down Tuesday, with the Taiwan dollar being the worst hit.

 

Crude oil rose above $110 a barrel after falling to $106 a barrel Monday amid reports that the US had agreed to temporarily waiver sanctions on Iranian oil. But with no official confirmation on the reports, oil prices quickly rose to $112 a barrel Monday. At 1530 IST, Brent crude oil for July delivery was at $110.38 a barrel, down from $112.1 Monday. Oil prices have risen 52% since the war began Feb. 28.

 

The Indian currency was under pressure as banks bought dollars on behalf of oil marketing companies and other importers, fearing that the rupee would fall more amid the global uncertainty, dealers said. "We are oil importers, that is why the rupee will keep deprecating. There is no way out," a dealer at a foreign bank said.

 

A sharp rise in the dollar index to a near six-week high during European trading hours also weighed on the Indian unit, dealers said. At 1530 IST, the dollar index was at 99.25, up from 98.95 Monday. The index rose to a high of 99.29 during the day as investors bet on rate hikes by the US Federal Reserve amid mounting inflation pressures.

 

FPI outflows from Indian markets added to the pressure on the currency, dealers said. "Foreign investors have been going out of the country. The government must roll out some measures to attract them. Only foreign inflows can help bring back the rupee," the dealer at the foreign bank said. FPIs have pulled out almost $1.43 billion worth of funds from Indian markets so far in May. Tuesday, the BSE Sensex and the Nifty 50 fell 0.2 and 0.1%, respectively.

 

Dealers expected the Reserve Bank of India to intervene at the 96.50-a-dollar level. However, the rupee touched an all-time low of 96.61 during the last leg of trade. "How much can RBI intervene now? It can only limit the fall, but it wasn't seen in the market today. Tomorrow (Wednesday) around 96.75 level, we can expect it to intervene," said a dealer at a private-sector bank.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	96.5325	96.3650	96.2800	96.6125	96.3450
1-year dlr/rupee fwd (paise)	337.75	335.25	337.95	330.55	333.00

 

FORWARDS

The one-year dollar-rupee forward premium rose for the fifth consecutive day as banks bought dollars for forward delivery on behalf of importers, who feared that the local currency would continue to fall, dealers said. The premiums rose to an over-six-week high of 3.49% Tuesday.

 

However, a rise in US Treasury yields limited the rise in forward premiums, dealers said. US Treasury yields rose to a one-year high of 4.61% Tuesday from 4.60% Monday.

 

The one-year exact-period dollar-rupee forward premium was 3.49% at 1530 IST, up from Monday's close of 3.45%. On an absolute basis, the premium was 337.75 paise, against 333.00 paise Monday.

 

OUTLOOK

Wednesday, the rupee will continue tracking 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. 

 

"Market participants continue to prefer dollar buying and rupee selling as a hedge against ongoing volatility and external sector pressure. The broader trend remains weak, with the rupee expected to trade in a range of 96.25–97.00 in the near term," Jateen Trivedi, vice-president and research analyst, commodity and currency, LKP Securities, said in a note. 

 

Dealers expect importers to continue buying dollars, fearing further depreciation of the rupee, which in turn 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. 

 

Dealers now see strong technical support for the Indian currency at 96.75 per dollar. The rupee is likely to move in a range of 96.20-96.80 against the dollar Wednesday.  End

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India Rupee - World FX: Sterling up as UK's Andy Burnham signals austerity

 

	AT 1434 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3394	1.3438	1.3390	1.3426
EUR/USD	1.1622	1.1661	1.1621	1.1659
NZD/USD	0.5845	0.5879	0.5844	0.5873
AUD/USD	0.7117	0.7177	0.7115	0.7167
USD/JPY	159.1290	159.1590	158.7640	158.6680
USD/CAD	1.3761	1.3761	1.3737	1.3740
EUR/JPY	184.9200	185.2110	184.9260	185.0362
CHF/USD	1.2706	1.2757	1.2702	1.2747
EUR/CHF	0.9147	0.9151	0.9136	0.9144

 

MUMBAI – The pound sterling Tuesday rose against the dollar as Andy Burnham, potentially the UK's next prime minister, said he would not ease fiscal rules and stick to borrowing limits assigned under the current framework. This helped the currency gain 0.3%. This follows growing voices in the Labour Party asking Kier Starmer to step down as prime minister due to the recent rout in local elections. 

 

The UK's latest unemployment data for March points to a marginal increase, with the unemployment rate rising to 5% from 4.9% in February. The average weekly wage growth slowed to 3.4% from 3.6%.

 

The dollar index rose Tuesday as investors increasingly demanded the dollar owing to its safe haven status. Further, the market is also pricing in at least one rate hike by the Federal Reserve as high inflation fuelled by soaring energy prices due to war in West Asia becomes a permanent fixture in the economy. The dollar index was 99.17 against 98.95 Monday and 99.27 Friday.

 

The euro was flat against the dollar as uncertainty surrounding a peace deal between the US and Iran kept investors away. The Japanese yen was marginally down against the dollar amid growing geopolitical instability and rising crude prices, while the Swiss franc was down 0.1% against the greenback. 

 

The Canadian dollar was marginally up against the dollar. (Suryash Kumar)

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India Rupee: Premium up as importers buy fwd dlrs after rupee hits new low

 

	AT 1336 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	96.4250	96.3650	96.2800	96.4725	96.3450
1-year dlr/rupee fwd (paise)	335.75	335.25	337.95	330.55	333.00

MUMBAI – The one-year dollar-rupee forward premium rose for the fifth consecutive day and stayed at a six-week high as banks bought dollars for forward delivery on behalf of importers, who feared that the local currency would continue to fall, dealers said. The forward premium touched a high of 337.95 paise after the rupee fell to an all-time low of 96.4725 a dollar in the spot market.

 

If the rupee continues to depreciate, market participants expect forward premiums to rise further. "The rupee is completely driven by global factors now. It will keep depreciating till there is positive news about the war," a dealer at a foreign bank said. The rise in crude oil prices and the dollar index kept the rupee under pressure. The currency has depreciated 1.4% against the dollar so far in May.

 

A rise in US Treasury yields limited the rise in forward premiums, dealers said. US Treasury yields rose to a one-year high of 4.61% Tuesday from 4.60% Monday.

 

The one-year exact period dollar-rupee forward premium was 3.48% at 1336 IST, up from Monday's close of 3.45%. On an absolute basis, the premium was 335.57 paise, against 333.00 paise Monday.  (Divya Moolayattil)

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India Rupee: Falls to record low on importers' demand, rise in dollar index

 

	AT 1252 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	96.4600	96.3650	96.2700	96.4725	96.3450

 

MUMBAI – The rupee fell to a record low against the dollar due to banks' persistent dollar demand on behalf of importers, who feared further fall in the Indian unit, dealers said. A rise in the dollar index continued to exert pressure on the rupee as investors flocked to safe-haven assets amid rising uncertainty on peace talks between the US and Iran. At 1252 IST, the dollar index rose to 99.16 from 98.95 Monday.

 

Crude oil prices crossed $110 a barrel even as US President Donald Trump paused attacks on Iran to make way for negotiations. "If the rupee has to make any meaningful reversal, global factors must become positive. Till then, we will see depreciation," a dealer at a private sector bank said. At 1252 IST, Brent crude oil prices for July delivery was at $110.19 a barrel, against $112.1 a barrel Monday. 

Most Asian currencies fell 0.01-0.3% against the dollar, with the Indonesian rupiah being the worst hit, which weighed on the rupee. However, domestic equity indices, the Nifty 50 and the Sensex, were marginally higher at 1250 IST. 

 

Market participants expect the Reserve Bank of India to step in through dollar sales in case the Indian unit depreciates sharply. "The rupee will depreciate, there is no other way out. I expect the RBI to step in at 96.50 (a dollar) to curb excessive volatility," the dealer said. In the recent past, the RBI has been actively intervening in the spot market to keep the Indian unit from depreciating excessively.

 

The rupee has fallen 1.3% so far in May and 5.4% since the war began on Feb. 28. "As India largely depends on imported crude for its oil needs along with the recent impact of gold imports has led to rapidly widening of the country's trade deficit, which is the prime reason for such a drastic depreciation in INR," Prashant Pimple, chief investment officer - fixed income, Baroda BNP Paribas Mutual Fund, said in a note. 

 

For the rest of the day, the rupee is seen moving between 96.20 and 96.60 against the greenback. Dealers peg immediate technical support for the rupee at 96.50 a dollar.  (Divya Moolayattil)

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India Rupee: Technical levels for rupee - May 19

 

MUMBAI – At 1104 IST, the rupee was at 96.3600 a dollar. At 0900 IST, the rupee was at 96.3650 a dollar, against the previous close of 96.3450. 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	96.60	96.50	96.15	96.00
Private-sector bank	96.60	96.40	96.25	96.00
Private-sector bank	96.70	96.50	96.10	95.90
Foreign bank	96.50	96.40	96.20	96.00
Foreign bank	96.60	96.50	96.00	95.95
Brokerage firm	96.80	96.50	96.20	95.90

 

(Divya Moolayattil)

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India Rupee: Steady as firm dollar index offsets fall in crude prices

 

	AT 0920 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	96.3650	96.3650	96.3100	96.3900	96.3450

 

MUMBAI – The rupee was steady, after hitting a record low against the dollar at opening on Tuesday, even as crude oil prices eased after US President Donald Trump said the US has postponed attacks on Iran at the request of Gulf countries and serious negotiations were taking place between the US and Iran. However, Trump said the US military is preparing to attack Iran if a deal is not reached soon.

 

Crude oil prices came off the highs seen on Monday, but stayed near $110 a barrel Tuesday. At 0910 IST, Brent crude oil prices for July delivery were at $109.92 a barrel, down from $112.1 Monday. "Oil is not moving much, and the US-Iran negotiations are also on, so the rupee is taking cues and mirroring it," a dealer at public sector bank said. 

 

The dollar index remained high as investors shifted to safe-haven assets, weighing on the Indian unit. At 0910 IST, the dollar index was at 99.10, up from 98.95 Monday, but slightly down from 99.27 Friday. Most Asian currencies were slightly down against the dollar in early trade Tuesday, which also weighed on the Indian unit.   

 

Persistent foreign investor outflows continued to be a pain point for the rupee, dealers said. FPIs have withdrawn nearly $1.43 billion worth of funds from Indian markets so far in May. The benchmark Nifty 50 and the Sensex were broadly stable in early trade on Tuesday. Dealers expect importers to buy dollars later in the day, which is expected to weigh on the rupee.

 

Market participants expect the Reserve Bank of India to step in through dollar sales to support the rupee, in case it heads towards sharp depreciation.  

 

For the rest of the day, the rupee is seen moving between 96.00 and 96.60 against the greenback. Dealers peg immediate technical support for the rupee at 96.40 a dollar.  (Divya Moolayattil)

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India Rupee: Expected range for rupee - May 19

 

MUMBAI – 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
Public-sector bank	96.55	96.00
Private-sector bank	96.50	95.80
Private-sector bank	96.60	96.00
Private-sector bank	96.55	95.80
Foreign bank	96.50	96.00
Brokerage firm	96.60	95.90

 

 

 

 

 

 

 

 

 

 

(Divya Moolayattil)

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India Rupee - Asia FX: Fall on rise in safe haven dollar, high US yields

 

MUMBAI – Most Asian currencies were down against the dollar as investors increasingly seek the greenback due to its safe haven status and as rising US yields drive investors from emerging markets to developed economies. Investors expect the yield to remain high as crude oil prices remain elevated, driven by the war in West Asia fuelling inflationary concerns.

 

At 0830 IST, the dollar index was at 99.10 against 98.95 Monday and 99.27 Friday, while the 10-year US yield closed at 4.61% Monday against 4.59% Friday. High crude oil prices also put pressure on Asian economies. Brent crude oil for delivery in July was at $109.91 per barrel, down over 2% at 0825 IST.

 

The Thai baht fell marginally against the dollar as foreign funds outflow and a stronger US dollar weighed on the currency. The Malaysian ringgit was up against the dollar, with strong fundamentals of the Malaysian economy stemming from being a hydrocarbon exporter supporting the currency. The ringgit was up 0.08% against the dollar. The ringgit also emerged as the second-best currency among its Asian peers, as it has declined only 0.1% against the dollar since the West Asia war intensified in early March.

 

The South Korean won fell over 1% against the US dollar Tuesday, while the Indonesian rupiah was 0.25% lower against the greenback. The Indonesian rupiah fell to a record low Monday despite intervention by its central bank as stocks fell and crude oil prices soared. The Philippine peso fell 0.12% against the dollar as rising US treasury yields and rising crude prices weighed on the currency.

 

The Chinese yuan was marginally up against the dollar, while the Taiwanese dollar was 0.07% lower against the greenback. (Suryash Kumar)

 

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

 

Edited by Rajeev Pai

 

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