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Informist, Thursday, Aug. 6, 2026

By Divya Moolayattil

MUMBAI – The rupee is expected to remain steady Thursday as crude oil prices were stagnant at $80 a barrel for the second consecutive day, with slight progress in negotiation between Iran and Oman to reopen the Strait of Hormuz. Iran's foreign ministry spokesperson Wednesday said Iran and Oman are close to finalising an agreement on an acceptable route for ships to pass through the Strait of Hormuz. Meanwhile, US President Donald Trump reiterated Washington is in talks with Tehran and that he prefers diplomacy to war.

Brent crude oil for October delivery was $79.82 a barrel, slightly up from $79.45 Wednesday. However, Brent remains far from the high of $100 a barrel seen last week. "No new major data or any news on West Asia has come in today, so the market will move today purely based on flows," a dealer at a private sector bank.  

The rupee is expected to open around 95.00-95.05 a dollar, after settling at 95.1175 on Wednesday. The Indian unit may move in a range of 94.90-95.35 against the dollar Thursday. The rupee closed sharply higher on Wednesday as crude oil prices fell below $80 for the first time in three weeks as the US signalled that the Strait of Hormuz will soon be open for trade. Dealers said there is good resistance at 94.90 a dollar, 94.75 is only possible Thursday if that breaks.

Dealers expect importers to persistently buy dollars, noting the fall in crude oil prices and relatively lower dollar-rupee levels, which will prevent a sharp appreciation of the Indian unit. They said that the importers were most active at 95.92-95.98 in the previous session, and that trend may continue Thursday as well.

Although the rupee may remain volatile intraday, the sentiment in the market remains positive due to robust inflows into Foreign Currency Non-resident (bank) deposits, dealers said. RBI Governor Sanjay Malhotra said in the post-policy press conference Wednesday that the recent measures to attract foreign fund inflows will help channel expectations on the rupee's exchange rate. Foreign fund inflows into the schemes announced by the RBI in June attracted $40.82 billion from Jun. 8 to Jul. 31, of which $36.73 came from FCNR (B) deposits.

Traders expect the Indian currency to continue rising and recent dollar inflows have also given the RBI more room to support the rupee, which led speculators to cut their bets against the rupee. 

FORWARDS

The one-year dollar-rupee forward premium is expected to fall as banks may sell dollars for forward delivery on behalf of foreign investors, to hedge against the depreciation of Indian currency, dealers said. FPIs invested $1.4 billion in the Indian market on Tuesday. Banks may also buy forward dollars for importers, which is likely to support.

On an annualised basis, the premium on the one-year exact-period dollar-rupee forward contract is seen at 2.70-2.85% Thursday. On Wednesday, it settled at 2.79%. On an absolute basis, the premium ended at 266.50 paise.

End

US$1 = INR 95.1175

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

Edited by Akul Nishant Akhoury

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