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Informist, Monday, Sept. 28, 2026

By Divya Moolayattil

MUMBAI – The rupee is expected to fall slightly against the dollar Monday as crude oil prices and US Treasury yields remain elevated, dealers said. However, the Indian unit is likely to remain rangebound as market participants expect the Reserve Bank of India to intervene through dollar sales to prevent the rupee from weakening past 96.00 per dollar.

The rupee is expected to open around 95.85 a dollar after settling at 95.8125 Friday. The local currency is expected to move in a range of 95.70-96.00 during the day, dealers said. Asian currencies fell against the dollar Monday, with the South Korean won and Thai baht leading the losses.

"The rupee will break 96 (a dollar) once this week and settle at around 95.50 (a dollar) post rate hike by the RBI," a dealer at a private sector bank said. Most traders expect the RBI's Monetary Policy Committee to hike the repo rate by 25 basis points each in October and December, with the rupee likely to move to 95.50 per dollar after potential hike in October. 

Brent crude oil prices rose to $106 per barrel Monday amid pessimism about the US and Iran reaching an agreement anytime soon after US President Donald Trump said he had rejected an Iranian proposal to reopen the Strait of Hormuz. With the proposal turned down, concerns over supply disruption risks around the Strait of Hormuz have intensified again, raising concerns over the potential impact on global energy supplies. At 0736 IST, Brent crude oil futures for November delivery traded at $106.04 a barrel, up from $104.32 a barrel Friday.

The US 10-year Treasury yield is now at 5.2%. The rise in crude oil prices alongside higher long-term yields suggests markets are attaching greater importance to inflation risks in the global outlook. Brent prices and US 10-year yields have also become more correlated since July.

On the domestic front, banks may continue to buy dollars for importers at relatively lower dollar-rupee levels, which could weigh on the Indian unit. Foreign portfolio outflows are also likely to put pressure on the rupee.

The three-day nationwide bank strike announced by the United Forum of Bank Unions has been deferred, which will keep trading volumes unaffected, dealers said.

FORWARDS

The one-year dollar-rupee forward premium is expected to rise Monday as dealers expect the RBI to continue conducting dollar-rupee sell-buy swaps to drain surplus rupee liquidity from the banking system. The central bank likely bought dollars for forward delivery in the near tenures on multiple days, as per dealers. 

On an annualised basis, the premium on the one-year exact-period dollar-rupee forward contract is seen at 3.45-3.50% Monday. Friday, it settled at 3.43%. On an absolute basis, the premium ended at 329.52 paise.

End

US$1 = INR 95.8125

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

Edited by Shubhayan Bhattacharya

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