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Informist, Thursday, Sept. 3, 2026

 

By Divya Moolayattil

 

MUMBAI – The rupee jumped up against the dollar Thursday to an over two-month high as the market's mood was positive after the Reserve Bank of India garnered a staggering $136.4 billion under its concessional foreign exchange swap facility, dealers said. The rupee posted its biggest single-day gain in over five weeks as the central bank also sold dollars continuously amid demand from importers for the greenback, they said.

 

"The RBI has bulked up its reserves, giving them plenty of firepower to control the rupee, whether it's appreciation or depreciation," a dealer at a private-sector bank said. "Everyone pretty much knows it by now--which is exactly why importers weren't rushing to hedge today. They are betting the rupee still has room to rise." 

 

After hitting a high of 94.2675 a dollar in early trade, the Indian currency settled at 94.4850 a dollar Thursday, up 0.5% from its previous close. The rupee was one of the better performers among Asian currencies. During the day, it moved in a wide range of 22 paise. Most Asian currencies rose 0.1-1.2% against the dollar Thursday, with the Japanese yen being the best performer, followed by the Indonesian rupiah and the Indian rupee. 

 

The rupee rallied sharply towards 94.33 in the offshore non-deliverable forwards market Wednesday after 1530 IST, triggered by the RBI official data release showing robust inflows into its swap schemes. The RBI likely intervened in the offshore market at 94.90 per dollar, backed by its massive foreign exchange reserves, dealers said.

Maintaining this upward momentum, the rupee Thursday opened 67 paise higher in the spot market compared to the previous session's close after inflows from the RBI's concessional swap facility reached a staggering $136.4 billion by Aug. 31, with banks mobilising around $127.2 billion in foreign currency non-resident (banks) deposits, far exceeding market expectations of $90 billion-$100 billion.

 

These inflows have pushed up India's foreign exchange reserves. As of Aug. 21, the RBI's foreign currency assets have increased by $48 billion since the start of the scheme in June, with the total foreign exchange assets at around $591.33 billion and overall reserves at an all-time high of $729.33 billion. The jump in the RBI's foreign exchange reserves offers it ample firepower to intervene in the market and control the movement of the rupee, dealers said.

 

The rupee came off the day's high as banks bought dollars on behalf of importers, noting a sharp appreciation of the Indian currency, dealers said. However, dollar sales by state-owned banks, likely for the RBI, ensured the rupee remained at an over two-month high.

 

Banks also sold dollars on behalf of exporters, who feared further appreciation of the rupee, which also boosted the Indian currency, dealers said. However, market participants said exporters hedged their positions partially, choosing to hold back in the expectation that the rupee may fall to 94.80 per dollar in the near term.

 

The dollar index fell on weaker-than-expected US ADP employment data, which supported the rupee. US private payrolls increased by 38,000 in August, the weakest pace since February and below market expectations of 46,000. At 1530 IST, the dollar index was at 99.26, sharply down from 99.58 Wednesday. 

 

However, the uncertainty due to the war in West Asia and higher crude oil prices continue to pose a risk to the rupee's rally. US President Donald Trump said Thursday renewed fighting with Iran will not last "too long", but threatened that US forces are ready to strike the country at any time. Brent crude oil prices rose to $97.33 per barrel at 1530 IST, up from $95.63 Wednesday.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.4850	94.3000	94.2675	94.4900	94.9700
1-year dlr/rupee fwd (paise)	280.63	280.50	282.75	278.88	286.03

 

FORWARDS

Dollar-rupee forward premiums edged lower across tenures, ending a two-day rise, owing to high rupee liquidity, thanks to the FCNR(B) inflows. Surplus liquidity in the banking system surged to INR 9.7 trillion Wednesday from INR 7.76 trillion a day earlier, as the strong inflows mobilised through the RBI's FCNR(B) swap scheme added to the systemic liquidity.

 

However, dealers remain wary of the long-term impact of the FCNR(B) deposits on the forward market. The RBI's net short forward position ballooned to a record high of $136.77 billion in July, concentrated in longer tenures, reflecting the RBI's future dollar obligations when these deposits mature in 3-5 years.

 

Dealers noted that some banks bought forward dollars for importers, noting relatively lower dollar-rupee premium, which limited the fall of the forward premiums. At 1530 IST, the one-year exact-period dollar-rupee forward premium was 2.97%, down from 2.99% Wednesday. On an absolute basis, the premium was 280.63 paise, lower than 286.03 paise at Wednesday's close.

 

OUTLOOK

Friday, the rupee is likely to track crude oil prices and developments in West Asia, where the war has been escalating, dampening hopes for a diplomatic resolution of the conflict. Market participants will watch the dollar index after US Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium was more hawkish than the August Federal Open Market Committee meeting. Investors are also closely watching key US data, particularly non-farm payrolls and unemployment figures, due Friday, which could influence the dollar and Fed rate hike expectations.

 

Dealers expect importers' dollar purchases to weigh on the currency. However, the RBI's pace of dollar sales will decide the rupee's direction. Dealers see strong technical resistance for the rupee at 94.20 per dollar. The rupee is expected to move in a range of 94.20-94.50 per dollar on the day.

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India Rupee - World FX: Dollar index falls on weaker US jobs data

 

	AT 1430 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3500	1.3507	1.3480	1.3483
EUR/USD	1.1609	1.1615	1.1584	1.1588
NZD/USD	0.5863	0.5869	0.5848	0.5846
AUD/USD	0.7182	0.7185	0.7159	0.7170
USD/JPY	156.7660	158.9640	156.3580	158.6630
USD/CAD	1.3808	1.3848	1.3804	1.3842
EUR/JPY	181.9660	184.1854	181.5810	183.8670
CHF/USD	1.2364	1.2371	1.2296	1.2290
EUR/CHF	0.9389	0.9425	0.9384	0.9414

 

MUMBAI – The dollar index eased Thursday after weaker-than-expected US employment data. US private payrolls increased by 38,000 in August, the weakest pace since February and below market expectations of 46,000. The dollar index was at 99.26 at 1430 IST, down from 99.58 Wednesday.

 

The dollar index also weakened after US President Donald Trump said renewed fighting with Iran will not last too long. At 1430 IST, Brent crude oil for November delivery remained broadly steady at $95.40 per barrel. However, Brent crude oil prices are up 6.5% from the previous week.

 

The Japanese yen jumped 1.2% to 157.77 per dollar after rallying sharply overnight on speculation that authorities had conducted a rate check, in which officials would contact banks to check exchange rates and signal the possibility of intervention.

 

The euro rose 0.2% to $1.1610, hovering near a two-week low, as investors worried about the impact of higher crude oil prices. The pound sterling was marginally higher at $1.3498 after hitting a three-week low the previous day. 

 

The Canadian dollar rose 0.2?ter the Bank of Canada kept its key policy rate unchanged at 2.25% at its September meeting, as had been widely expected, but noted that inflation risks had increased significantly. The Swiss franc gained 0.2% as the safe-haven demand for the greenback ebbed.  (Divya Moolayattil)

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India Rupee: Premiums edge lower on surplus liquidity; importers' demand weighs

 

	AT 1415 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.4875	94.3000	94.2675	94.4900	94.9700
1-year dlr/rupee fwd (paise)	280.75	280.50	282.75	278.88	286.03

 

MUMBAI – Dollar-rupee forward premiums edged lower across tenures, snapping two consecutive days of gains, owing to high rupee liquidity, thanks to inflows into the foreign currency non-resident (banks) scheme. Surplus liquidity in the banking system surged to INR 9.7 trillion on Wednesday from INR 7.76 trillion a day earlier, as strong inflows mobilised through the RBI's FCNR (B) swap scheme added to the system's liquidity.

 

The RBI Wednesday said its concessional swap facility has garnered $136.4 billion, with banks raising $127.23 billion through FCNR(B) deposits despite its early closure, sharply above the expectations of most market participants. 

 

However, dealers remained wary of the long-term impact of the FCNR(B) deposits on the forward market. The RBI's net short forward position ballooned to a record high of $136.77 billion in July, concentrated in longer tenures, reflecting the RBI's future dollar obligation when these deposits mature in 3-5 years.

 

"Forwards receiving against surplus liquidity, but the problem is that the RBI is subsidising to get dollars from banks and the RBI's forward books will balloon up with the FCNR deposits, and that won't reflect in the country's balance of payments as well, which would impact the outlook of the country later and reduce foreign inflows," a dealer from a foreign bank said. 

 

However, dealers noted that some banks bought forward dollars for importers, noting relatively lower dollar-rupee premium, which limited the fall of the forward premiums. The 10-year US Treasury yield fell slightly to 4.77% from 4.78% Wednesday, which also supported forward premiums, they said.

 

At 1400 IST, the one-year exact-period dollar-rupee forward premium was 2.96%, down from 2.99% Wednesday. On an absolute basis, the premium was 280.13 paise, lower than 286.03 paise at Wednesday close. (Divya Moolayattil)

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India Rupee: Off highs as importers buy dollars; likely RBI dollar sales aid

 

	AT 1300 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.4700	94.3000	94.2675	94.4900	94.9700

 

MUMBAI – The rupee came off its day's high against the dollar as banks bought dollars on behalf of importers, noting a sharp appreciation of the Indian unit, dealers said. However, dollar sales by state-owned banks, likely for the Reserve Bank of India, ensured the rupee remained at an over two-month-high Thursday. The rupee hit a high of 94.2675 in early trade but was at 94.4700 as on 1300 IST.

 

"Importers are buying (dollars) aggressively as the rupee has come down at these level after two months. But, the RBI is supplying actively and not letting the rupee (USD/INR) rise beyond 94.50," a dealer at a private sector bank said. The RBI intervention has changed the outlook for the Indian unit to positive from steady depreciation. The local currency has strengthened by almost a rupee from 94.38 in the previous week. 

 

The positive sentiment prevailed in the market as more-than-expected inflows into foreign currency non-resident (bank) deposits kept the rupee at two-month-high. Inflows through the RBI's concessional swap facility reached a staggering $136.4 billion by Aug. 31, with banks mobilising around $127.2 billion in FCNR(B) deposits, far exceeding market expectations of $90 billion-$100 billion. 

 

These inflows have pushed up India's foreign exchange reserves as of Aug. 21. The RBI's foreign currency assets have increased by $48 billion since the start of the scheme in June, with the total foreign exchange assets at around $591.33 billion, and overall reserves at an all-time high of $729.33 billion. The jump in the RBI's foreign exchange reserves offers it ample firepower to intervene in the market and control the movement of the rupee, dealers said.

 

The dollar index fell on weaker-than-expected US ADP employment data, which supported the rupee. US private payrolls increased by 38,000 in August, the weakest pace since February and below market expectations of 46,000. At 1300 IST, the dollar index was 99.27, sharply down from 99.58 Wednesday. 

 

However, the uncertainty due to the war in West Asia and higher crude oil prices continue to pose a risk to the rupee's strength. US President Donald Trump said renewed fighting with Iran will not last "too long", but threatened that US forces are ready to strike Iran any time. Brent crude oil prices remained broadly steady at $95 per barrel at 1300 IST.

 

For the rest of the day, the rupee is seen moving in the range of 94.20-94.50. Dealers see immediate technical support for the rupee at 95.20 a dollar.  (Divya Moolayattil) 

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India Rupee: Technical levels for rupee - Sept 3

 

MUMBAI – At 1122 IST, the rupee was at 94.4700 a dollar. At 0900 IST, the rupee was at 94.3000 a dollar, against the previous close of 94.9700. Following are the key support and resistance levels for the rupee as provided by leading banks and a brokerage: 

 

Participant	S2	S1	R1	R2
Public-sector bank	94.75	94.50	94.25	94.05
Private-sector bank	94.70	94.50	94.20	94.00
Private-sector bank	94.65	94.55	94.25	94.15
Private-sector bank	94.60	94.50	94.20	94.10
Brokerage firm	94.70	94.50	94.20	94.10

 

(Divya Moolayattil)

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India Rupee - Asia FX: Rise as dlr eases on weak jobs data; Japanese yen up

 

MUMBAI – Asian currencies rose in early trade Thursday as the dollar index eased after weaker-than-expected US ADP employment data. US private payrolls increased by 38,000 in August, the weakest pace since February and below market expectations of 46,000. The dollar index was at 99.41 at 1000 IST, down from 99.58 Wednesday.

 

The dollar index also weakened after US President Donald Trump said renewed fighting with Iran will not last too long. At 1000 IST, Brent crude oil for November delivery remained broadly steady at $95.25 per barrel. However, Brent crude oil prices are up 6.5% from the previous week.

 

The Japanese yen rose the most among the Asian peers, followed by the Indian rupee and the Thai baht. The Japanese yen jumped 1.2% to 157.77 per dollar on Thursday after rallying sharply overnight on speculation that authorities had conducted a rate check, in which officials would contact banks to check exchange rates and signal the possibility of intervention.

 

The Indian rupee rose 0.55% to 94.47 a dollar Thursday, while the Thai baht was up 0.54% to 32.97 per dollar.

 

The Indonesian rupiah also rose 0.45% to 17,685 per dollar after it fell to a two-week low in the previous session following escalations in the West Asia war. The Singapore dollar also rose 0.3% to 1.26 per US dollar as the greenback remained weak.

 

The Philippine peso, the Taiwan dollar, the Chinese yuan, and Hong Kong dollar were broadly steady against the dollar.  (Divya Moolayattil)

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India Rupee: Jumps to over 2-mo high on strong inflows into RBI swap scheme

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.4700	94.3000	94.2675	94.4775	94.9700

 

MUMBAI – The rupee jumped to over two-month high against the dollar Thursday as the market turned positive after the Reserve Bank of India's concessional swap facility reached a staggering $136.4 billion by Aug. 31, with banks mobilising around $127.2 billion in foreign currency non-resident (bank) deposits, far exceeding market expectations of $90 billion-$100 billion. The rupee opened 67 paise higher to 94.30 per dollar Thursday. 

 

Even as the rupee remained at an over two-month high, it erased gains of around 15 paise as banks bought dollars for importers, noting relatively lower dollar-rupee levels, dealers said. "The rupee erased around 15 paise as soon as the market opened as importers came in immediately to lock in dollar purchases at rates not seen since June," a dealer at a public sector bank said. 

 

Banks also sold dollars on behalf of the exporters, fearing further appreciation of the rupee, which supported the rupee, dealers said. Traders also unwound their long dollar bets Wednesday after the RBI released official data showing the swap scheme garnered $136.38 billion as of Aug. 31, which led to a sharp jump of the Indian unit. 

 

For the rest of the day, the rupee is expected to move in the range of 94.15-94.60 per dollar. Dealers see immediate support for the rupee at 94.50 per dollar.  (Divya Moolayattil)

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India Rupee: Expected range for rupee - Sept 3

 

MUMBAI – Following are the support and resistance levels expected for the rupee Thursday, as forecast by leading banks and brokerages in an Informist poll:

 

PARTICIPANT	SUPPORT	RESISTANCE
Public-sector bank	94.75	94.25
Private-sector bank	94.50	94.15
Private-sector bank	94.70	94.20
Foreign bank	94.50	94.10
Brokerage firm	94.58	94.09

 

 

 

 

 

 

 

 

(Divya Moolayattil)

 

End

 

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

 

Edited by Rajeev Pai

 

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