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Informist, Monday, Aug. 24, 2026

By Divya Moolayattil

MUMBAI – The rupee is expected to inch up against the dollar Monday as crude oil prices edged down to $92 per barrel. Elevated crude inventories and mixed demand forecasts, temporarily eased pressure after persistent West Asia supply risks had driven crude oil prices higher. The Indian currency is likely to track the Asian units, which remained broadly flat in early trade Monday. At 0800 IST, Brent crude for October delivery was $92.81 per barrel, down from $94.39 Friday.

Markets will keep a close watch on the "toughest" economic sanctions that the US is set to impose on Iran late Monday. US Treasury Secretary Scott Bessent described the measures as an unprecedented campaign of economic isolation designed to pressure Iran and its trading partners into compliance.

The rupee is likely to open around 95.65-95.69 per dollar, and is expected to move in a range of 95.50-95.75 Monday after settling at 95.6950 Friday. Dealers expect the Reserve Bank of India to keep supporting the rupee and maintain its recent stable range, just as it has done for the past two weeks. 

The central bank is using the foreign currency non-resident (bank) deposits to intervene in the market to keep the rupee range bound, dealers said. The RBI's measures to boost foreign capital inflows have attracted $72.85 billion from Jun. 8 till Friday. Of this, nearly 90% of these inflows came from FCNR(B) deposits scheme at $65.40 billion.

"Last week's inflows into FCNR (B) deposits will only impact liquidity, not on the (rupee) spot. We expect FCNR flows to cross $85 billion even with the shorter deadline," a dealer from a private sector bank said. 

Another dealer noted that inflows into FCNR (B) deposits may not heavily influence the rupee as its deadline approaches. These flows have merely stabilised the rupee rather than driving the rupee-dollar exchange rate to higher levels, the dealer said.

Dollar purchases by banks on behalf of importers on every dollar-rupee dip amid volatility in crude oil prices are expected to put further pressure on the currency.

A weaker dollar index is likely to support the Asian currencies, including the Indian rupee. At 0800 IST, the index was 98.81, down from 98.86 Friday.

FORWARDS 

The one-year dollar-rupee forward premium is expected to rise as banks may buy dollars for forward delivery on behalf of importers, dealers said.

On an annualised basis, the premium on the one-year exact-period dollar-rupee forward contract is seen at 2.85-2.95% Monday. On Friday, it settled at 2.89%. On an absolute basis, the premium ended at 276.70 paise.

End

US$1 = INR 95.6950

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

Edited by Akul Nishant Akhoury

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