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Informist, Friday, Aug. 14, 2026

By Divya Moolayattil

MUMBAI – The rupee is expected to inch up against the dollar in early trade Friday as the greenback weakened overnight after the US producer price index was flat in July, reinforcing expectations that the Federal Reserve would keep interest rates unchanged next month. However, the dollar purchases by importers are likely to put pressure on the Indian unit. 

The rupee is likely to open at 95.35-95.40 a dollar Friday, after it settled slightly lower at 95.4400 Thursday. The Indian unit is likely to move in a range of 95.20-95.50 against the dollar during the day. Dealers expect the Reserve Bank of India to keep the rupee rangebound Friday, despite volatile global factors. The RBI has intervened in the past two weeks, countering the aggressive dollar demand from importers. 

Most Asian currencies were broadly steady against the dollar in early trade Friday, with the Taiwan dollar bucking trend and rising sharply by 0.5% due to foreign capital inflows into local equities. 

A fall in crude oil prices is expected to support the Indian unit. Crude oil prices maintained downward pressure despite persistent risks to shipping through the Strait of Hormuz as OPEC and International Energy Agency forecast there will be a cut in oil demand in 2026. Meanwhile, US Secretary of Defence Pete Hegseth said that the US could sustain its blockade against Iran "indefinitely", raising fears of further disruption in energy supply. At 0815 IST, Brent crude oil for October delivery was $86.82 per barrel, up from $87.07 Thursday. 

Dealers expect importers to buy dollars actively, fearing further depreciation of the rupee amid uncertainty in the West Asia war, which will weigh on the Indian unit. 

Traders also await the release of WPI inflation data for July by the commerce ministry at 1200 IST. According to the median of estimates from 12 economists, WPI inflation in July is seen to have inched up to 10%, up from 9.87% in June due to higher food prices as well as an unfavourable base effect. 

FORWARDS

The one-year dollar-rupee forward premium is expected to fall on liquidity surplus, thanks to inflows into the foreign currency non-resident (banks) scheme. However, the fall in forward premiums 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 2.68-2.75% Friday. On Thursday, it settled six-weeks low at 2.73%. On an absolute basis, the premium ended at 260.50 paise. 

End

US$1 = INR 95.4400

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

Edited by Akul Nishant Akhoury

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