More Stories

Informist, Monday, Aug. 3, 2026

 

By Pratiksha

 

NEW DELHI – The rupee is expected to remain broadly unchanged from current levels against the dollar this month owing to hopes of strong foreign fund inflows on the back of the Reserve Bank of India's June measures, market participants said. Foreign inflows from the RBI's concessional swap window for foreign currency non-resident deposits and external commercial borrowings are expected to keep the Indian unit cushioned in the face of global uncertainty, they added. 

 

The rupee depreciated 0.8% against the dollar last month as the price of Brent crude jumped over 23% as the peace deal between the US and Iran fell through after the war in West Asia escalated again. The Indian currency is likely to settle at 95.25 a dollar by the end of this month, broadly steady from 95.38 at the end of July, according to the median of estimates from 14 banks and brokerages polled by Informist. Of the 11 respondents, only three expect the rupee to fall below the key 96.00 per dollar mark this month. 

 

"I see a comfortable August for rupee. Most of the flows will start coming to RBI now. Not too much volatility is expected," Ritesh Bhansali, deputy chief executive officer at Mecklai Financial Services Ltd., said. "RBI will absorb the flows and intervene to support rupee, or even make it appreciate. Equity flows also seem to be picking up now."

As per latest data, the RBI's measures to garner inflows through FCNR (B) deposits, overseas foreign currency borrowings by banks, and external commercial borrowings by public sector undertakings attracted $40.82 billion from Jun. 8 till Friday. A major portion of these inflows came from FCNR(B) deposits at $36.73 billion.

 

The current run-rate suggests that dollar inflows on the back of the RBI's incentive scheme could be quite significant in the coming two months, market participants said. Total inflows across instruments are likely to be around $90 billion, as per some participants. The Indian currency is likely to settle at 94.95 a dollar by the end of September, according to the median of estimates from 12 banks and brokerages polled by Informist.

 

At a time when crude oil prices have been flucutuating sharply on a day-to-day basis, the RBI's concessional swap window allows the RBI to absorb incoming dollars to relieve downward rupee depreciation pressure without depleting direct foreign exchange reserves. India's foreign exchange reserves jumped to a 10-week high of $682.35 billion as of Jul. 24. 

 

"Indirectly, and more importantly, it (inflows under the swap facilities) change market psychology: participants know the pipeline (of inflows) exists, which discourages speculative positioning against the rupee," Anindya Banerjee, head of research - commodity and currency, Kotak Securities, said. 

 

However, some market participants pointed out that given the central bank's large forward book, aggressive spot market interventions by the RBI to support the rupee will likely be measured. The RBI's net outstanding foreign exchange forward book was at $103.33 billion at the end of June. 

 

Meanwhile, some market participants also expect the Indian unit to receive support from foreign portfolio inflows, noting the continued net FPI inflows into Indian markets for the last two months. In July, FPIs infused funds worth $4.14 billion into domestic markets, helped by attractive valuations and improving corporate earnings.

 

GLOBAL TROUBLE

While things on the West Asia war front have improved over the weekend, given the volatility in the global situation, market participants will remain on edge and continue to keep a close eye on any fluctuations in crude oil prices. Brent crude oil price fell more than $4 a barrel on Monday after US President Donald Trump held off a fresh attack on Iran, seeking a quick peace deal that would halt Tehran's nuclear ambitions and reopen the Strait of Hormuz. 

 

Market participants expect the rupee to continue being sensitive to the movement in crude oil prices. So far in 2026, the Indian unit has fallen over 6% against the dollar. While most traders do not expect crude oil prices to sustainably rise above $100 per barrel, in case it happens, they expect the rupee to fall sharply below 96 a dollar. 

 

"The (rupee) path is conditional on crude. If Brent remains under $90 (a barrel), we could see the rupee strengthen further towards 93 (per dollar)," Banerjee said. "If crude inches back towards $100, we would expect the rupee to hold around 94 rather than extend its gains."

 

Further, market participants remain uncertain about the trajectory of the US dollar after the US Federal Reserve held interest rates steady last month. Market participants remain uncertain about the Fed's interest rate path as questions about how Fed Chief Kevin Warsh will deliver on his commitment ‌to bring inflation back down to the 2% target remain. Last month, the dollar index fell almost 1.2%. 

 

POLL DETAILS

 

Participant	Aug-end	Sept-end
Bank of Baroda	94.50-95.50	94.50-95.50
Canara Bank	95.00-95.50	94.80-95.00
CR Forex	96.50	97.50
CSB Bank	95.50	94.75
Finrex Treasury Advisors LLP	95.10	94.30
Globe Capital Market	94.60-96.60	94.00-97.50
HDFC Securities	94.50-95.50	-
IBM India	95.60	96.50
IDFC FIRST Bank	95.00	94.50
Karur Vysya Bank	95.00-95.50	95.00-95.50
Kotak Securities	94.50	94.00
LKP Securities	94.75	94.00
Mecklai Financial Services	95.50-95.75	-
Shinhan Bank India
South Indian Bank	94.00-96.50	94.00-96.50
Median	95.25	94.95

 

End

 

US$1 = INR 95.34

 

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.