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Informist, Tuesday, Sept. 8, 2026

By Divya Moolayattil

MUMBAI – The rupee is expected to remain largely steady against the dollar Tuesday, with the Reserve Bank of India intervention likely to cushion the impact of elevated crude oil prices and persistent dollar demand, dealers said. The central bank has been actively selling dollars in the spot and offshore markets, keeping the Indian currency range-bound for more than three weeks. The rupee ended unchanged for a second straight session Monday.

The rupee is likely to open at 94.45-94.50 per dollar and trade in a 94.35-94.55 range Tuesday, after settling flat at 94.4850 Monday. The currency moved in a narrow 11-paise band during the previous session as the RBI was active in both the spot and offshore non-deliverable forward markets. Most Asian currencies gained in early trade Tuesday as the dollar weakened.

Dealers said the rupee would likely be trading near 95.75 per dollar in the absence of the RBI's intervention. The central bank's swap facility, which garnered $136 billion in inflows, has strengthened its ability to intervene and contain volatility in the currency, they said. The inflows also helped lift India's foreign exchange reserves to a record $740.80 billion as of Aug. 28.

However, the stability in the rupee is yet to alter hedging behaviour, dealers said. The currency could face pressure during the day as banks are likely to step up dollar purchases on behalf of importers whenever the dollar-rupee pair dips, limiting gains in the rupee.

A substantial improvement in foreign fund inflows or a decline in crude oil prices to around $85 a barrel could push the dollar-rupee pair below 94, dealers said.

The dollar index fell to a more than two-week low of 98.74 from 98.90 Monday, extending losses for a second straight session as the yen strengthened to around 153 per dollar, above its pre-war levels. Traders now await US inflation data due this week for cues on the Federal Reserve's interest-rate trajectory and the dollar's direction.

Brent crude oil for November delivery rose to a nearly six-week high of over $97 a barrel amid ongoing US-Iran strikes in the Strait of Hormuz, posing a fresh risk to the rupee's recent stability. A Qatari official said reopening the Strait of Hormuz was a priority, warning that a prolonged crisis could lead to an "industrial catastrophe."

FORWARDS

Dollar-rupee forward premiums may inch down due to surplus liquidity as banks avail the RBI's swap window to offload the dollars stemming from robust foreign currency non-resident (bank) deposit inflows, dealers said. Higher benchmark US Treasury yields are also likely to put pressure on the forward premiums. However, the fall may be limited 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 3.00-3.07% Tuesday. On Monday, it settled at 3.07%. On an absolute basis, the premium ended at 290.39 paise.

End

US$1 = INR 94.4850

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

Edited by Akul Nishant Akhoury

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