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Informist, Wednesday, Sept. 30, 2026

By Divya Moolayattil

MUMBAI – The rupee is expected to inch up as crude oil prices, US yields and dollar index fell following the signs of improving energy flows from the West Asia and another major release of emergency reserves in the US helped ease supply concern.

However, the strong demand from importers and foreign fund outflows may put pressure on the Indian unit and push it past 96 per dollar during the day. The Reserve Bank of India's intervention through dollar sales may support the rupee.

The rupee is expected to open around 95.94 per dollar after settling at 95.9800 a dollar in the previous session. The local currency is expected to move in the range of 95.80-96.10 during the day, the dealers said. Few other dealers expect the Indian unit to be supported by the RBI and stay below 96 a dollar.

Asian currencies were broadly steady Wednesday, barring the South Korean won, which fell nearly 0.3% in early trade Wednesday. 

At 0745 IST, Brent crude oil prices for December delivery fell to $96.45 a barrel, down from $97.46 per barrel at the end of Indian foreign exchange market hours Tuesday. The fall in prices was due to the output from Saudi Arabia's East-West pipeline coming through faster than anticipated, which should help ease the energy supply crunch that has dialled up inflationary pressures worldwide. Saudi Arabia restored flows through the pipeline to around 3.5 million barrels per day. Brent was headed for a monthly gain of around 13%. 

The 10-year US Treasury yield eased slightly to 5.23% Wednesday from 5.24% Tuesday. The 2-year Treasury yield also fell after New York Fed President John Williams said that the central bank need not rush to continue raising interest rates. Traders now see only 47.1% probability of a rate hike by the Fed in October, compared with 70.9% probability a day ago. The dollar index also fell slightly to 101.32 from 101.38 Tuesday. 

On the domestic front, banks may continue to buy dollars for importers, which could weigh on the Indian unit. "The rupee (USD/INR) below 96 is a good level for the importers, so they will keep buying. Also, the month-end demand will be there," a dealer at a private sector bank said. Foreign portfolio outflows are also likely to put pressure on the rupee.

FORWARDS

The one-year dollar-rupee forward premium is expected to rise Wednesday 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 3.30-3.40% Wednesday. On Tuesday, it settled at 3.32%. On an absolute basis, the premium ended at 318.21 paise.

End

US$1 = INR 95.9800

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

Edited by Akul Nishant Akhoury

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