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Informist, Friday, Aug. 28, 2026

 

By Divya Moolayattil

 

MUMBAI – The rupee rose sharply Friday to its highest closing level in more than two weeks, supported by active intervention from the Reserve Bank of India and foreign fund inflows, dealers said. However, persistent dollar demand from importers capped the rise, while an overnight increase in crude oil price weighed on the currency.

 

"The rupee jumped intraday as some foreign banks sold dollars heavily on account of MSCI-related inflows. The RBI also stepped into the market to cushion the rupee against uncertainty over the weekend," a dealer at a private-sector bank said.

 

The rupee settled at 95.3775 per dollar, up 0.2% from Thursday's close. It moved in a 25-paise range during the day, among the wider ranges seen this month. With just one more trading session in the month, the rupee is largely unchanged from its July-end level, with the RBI's dollar sales keeping the currency well behaved despite the occasional bouts of volatility.

 

Asian currencies were mixed as investors awaited US Federal Reserve Chair Kevin Warsh's first speech at the annual Jackson Hole symposium later in the day for clues to the US interest-rate outlook. The South Korean won was the best-performing Asian currency while the Philippine peso was the worst performer.

 

The rupee was broadly steady in early trade as investors found few triggers for dollar demand apart from importer purchases. Public-sector banks sold dollars, likely on behalf of the Reserve Bank of India, helping keep the currency steady for most of the session.

 

Dealers said the RBI has room to intervene actively and support the rupee, backed by robust dollar inflows through foreign currency non-resident (banks) deposits. The RBI's measures to boost foreign capital inflows have attracted $72.85 billion between Jun. 8 and Friday, of which nearly 90%, or $65.40 billion, has come through the FCNR(B) deposit scheme. Market participants expect FCNR(B) inflows to exceed $85 billion by Monday.

 

The rupee rose nearly 15 paise intraday as banks sold dollars linked to inflows from MSCI's index rebalancing. Global index provider MSCI added Adani Energy Solutions, Billionbrains Garage Ventures, Laurus Labs, and Lenskart Solutions to its global standard index as part of its August review while removing Astral, Balkrishna Industries, and SBI Cards and Payment Services. The changes are scheduled to take effect after the close of trading on Aug. 31.

 

However, the rupee's rise was capped as banks bought dollars for importers meeting month-end payment obligations, which weighed on the domestic currency. A rise in crude oil prices overnight also kept sentiment towards the rupee subdued. Brent crude neared $90 a barrel Friday after having fallen sharply in the previous session, as the escalation in the Russia-Ukraine war and uncertainty over a potential peace deal between the US and Iran renewed concerns about supply. At 1530 IST, Brent crude for November delivery was at $88.25 a barrel, compared with Wednesday's low of $85.32.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.3775	95.5100	95.3300	95.5700	95.5400
1-year dlr/rupee fwd (paise)	275.20	279.66	280.20	274.69	280.50

 

FORWARDS

Dollar-rupee forward premiums eased as dollar liquidity in the market improved after the RBI allowed banks to access its swap window for dollars raised through FCNR(B) deposits more than once a week, including transactions above $100 million, to manage a surge in dollar liquidity. The greater flexibility has allowed banks to park dollar inflows with the RBI rather than hold excess dollars on their books, easing near-term swap costs.

 

"More rupee liquidity in the system will lead to near forwards cooling off. An increase in the VRRR amount, and the RBI taking other measures to cool off liquidity, will also help," a dealer at a large private-sector bank said.

 

The move resulted in some of the sharp rise in forward premiums Thursday being reversed, when surplus dollar liquidity had pushed up swap costs as banks absorbed inflows that were nearly twice the usual amount following Wednesday's holiday and ahead of the FCNR(B) deposit window deadline.

 

However, dealers said banks also bought forward dollars on behalf of importers after the sharp overnight rise in crude oil prices, limiting the decline in forward premiums.

 

Higher US Treasury yields also weighed on premiums. The 10-year US Treasury yield rose to 4.68% at 1530 IST from 4.67% Wednesday.

 

At 1530 IST, the one-year exact-period dollar-rupee forward premium was 2.89%, down from 2.94% at Thursday's close. On an absolute basis, the premium was 275.20 paise, compared with 280.50 paise Thursday.

 

OUTLOOK

Monday, the rupee is likely to track crude oil prices and developments in the West Asia conflict, particularly Iran's conditions for reopening the Strait of Hormuz. Markets will closely watch the US response to Iran's conditions. A positive response could improve risk appetite and provide some relief to the rupee amid uncertainty over the duration of the conflict, dealers said.

 

Market participants will also react to Fed Chair Kevin Warsh's speech, scheduled for Friday. The speech is expected to offer cues to the US central bank's interest-rate path at the next meeting of the US Federal Open Market Committee. The dollar index is likely to react to his comments, which could influence the rupee Monday.

 

Dealers expect importer dollar demand to weigh on the currency. However, continued RBI dollar sales are likely to cushion the rupee. Market participants will also track dollar inflows through the FCNR(B) scheme, with Monday marking the deadline for the deposit window.

 

Dealers see strong technical support for the rupee at 95.50 per dollar, a break below which could drag the currency towards 95.75 a dollar. The rupee is expected to move in a range of 95.30-95.50 per dollar Monday.

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India Rupee - World FX: Dollar index inches up; market awaits Fed chair's comments

 

	AT 1430 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3584	1.3598	1.3581	1.3592
EUR/USD	1.1643	1.1656	1.1642	1.1651
NZD/USD	0.5949	0.5966	0.5950	0.5948
AUD/USD	0.7193	0.7205	0.7192	0.7194
USD/JPY	159.5800	159.5870	159.2700	159.3810
USD/CAD	1.3856	1.3858	1.3848	1.3851
EUR/JPY	185.8020	185.8540	185.5800	185.7100
CHF/USD	1.2431	1.2443	1.2417	1.2432
EUR/CHF	0.9366	0.9378	0.9363	0.9363

 

MUMBAI – The dollar index rose slightly Friday as investors await Kevin Warsh's first speech as Federal Reserve chair at the annual Jackson Hole symposium late Friday, for further cues on the interest rate outlook. Traders now see a 66% chance of the Fed holding the interest rates next month, up from 64% Thursday, according to the CME FedWatch Tool. At 1430 IST, the dollar index was 99.20, up from 99.13 Thursday. 

 

The euro fell marginally to $1.1643 Friday. Meanwhile, inflation data from France and Spain showed renewed price pressures, increasing bets of an rate hike by the European Central Bank in September. France's inflation rose to 2.7% in August, a three-month high, while Spain's climbed to 4.5%, its highest since 2023. The sterling pound was down 0.1% at $1.3586, retreating from six-month highs reached last week. 

 

The Japanese yen fell 0.12% to 159.58 per dollar. Tokyo's inflation firmed up in August, adding fresh support to the case for another rate hike as soon as September. Headline CPI rose to 1.9% year-on-year in August, the highest level this year, from 1.8% in July. 

 

The Canadian dollar and Australian dollar were broadly steady against the dollar Friday.  (Divya Moolayattil)

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India Rupee: Premiums fall as dlr liquidity eases after swap leeway

 

	AT 1410 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.4375	95.5100	95.3300	95.5700	95.5400
1-year dlr/rupee fwd (paise)	275.70	279.66	280.20	274.69	280.50

 

MUMBAI – Dollar-rupee forward premiums inched down as dollar liquidity eased in the market after the Reserve Bank of India allowed banks to access the swap window for dollars raised through foreign currency non-resident (bank) deposits more than once a week. This leeway has allowed banks to park dollar inflows with the RBI, rather than keeping them idle for a long time, which brought down near-term swap costs.

 

This move led to a fall in premiums, which had risen sharply on Thursday due to surplus dollar liquidity in the market as banks had to absorb dollar inflows that were twice the usual amount, following Wednesday's holiday and as the FCNR(B) deposit window neared its deadline.

 

However, dealers said banks also bought forward dollars on behalf of importers after crude oil prices rose sharply overnight, which limited the fall in forward premiums.

 

A hike in the 10-year US Treasury yield to 4.68% at 1400 IST from 4.67% on Wednesday also weighed on forward premiums. At 1400 IST, the one-year exact period dollar rupee forward premium was 2.89%, down from 2.94% Thursday. On an absolute basis, the premium was 275.70 paise, against 280.50 paise at close Thursday.  (Divya Moolayattil)

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India Rupee: Steady; RBI's action counters dollar demand, higher oil prices

 

	AT 1230 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.5450	95.5100	95.5100	95.5700	95.5400

 

MUMBAI – The rupee remained broadly steady against the dollar Friday as public sector banks sold dollars, likely on behalf of the Reserve Bank of India, dealers said. The central bank has been supporting the rupee actively at multiple level to keep the Indian unit steady for three weeks despite the higher crude oil prices and importers' dollar demand. The Indian unit moved in a narrow range of 6 paise during the day.  

 

"I think the same trend will continue for the next week as well. The rupee may move in a tight range because of RBI's active support. The FCNR (B) inflows are rushing in the final days, so that will be positive for the rupee," a dealer at a public-sector bank said.

 

The RBI's measures to boost foreign capital inflows have attracted $72.85 billion between Jun. 8 and Friday, of which nearly 90%, or $65.40 billion, came through the FCNR(B) deposit scheme. Market participants expect FCNR(B) inflows to exceed $85 billion by Monday, with inflows bunched up after the central bank reduced the window for eligible deposits by a month to Aug. 31. 

 

However, banks bought dollars for importers, who wanted to meet their month-end payment obligation, which weighed on the Indian unit. A rise in crude oil prices to around $90 per barrel also put pressure on the Indian unit. At 1220 IST, Brent crude oil for November delivery rose to $88.03 per barrel, from Thursday's low of $85.32 per barrel. Brent Crude traded at $86 per barrel for most of Thursday. 

 

Ongoing Ukrainian strikes on Russian refineries and ports and Russia's retaliatory strikes are disrupting energy infrastructure of both countries, which could constrain crude exports. Meanwhile, US President Donald Trump said he was not interested in resuming peace talks with Iran, which added to the cautious sentiment in the market. 

 

For the rest of the day, the rupee is expected to move in the range of 95.45-95.60 per dollar. Dealers see immediate technical support for the rupee at 95.60 a dollar.  (Divya Moolayattil)

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India Rupee - Asia FX: Mixed; Philippine peso falls most, hits record low

 

MUMBAI – Asian currencies moved on a mixed note against the dollar Friday, with the Philippine peso falling the most among regional peers and the Taiwan dollar leading gains. 

 

The peso fell to an all-time low of 62.16 per dollar due to the Philippines' larger-than-expected trade deficit number and higher crude oil prices. The Philippines' trade deficit widened to $5.97 billion in July from a revised $5.5 billion shortfall in June, according to data released on Friday. The figure is higher than economists' estimate for a $5.15 billion deficit.

 

The Philippine central bank on Thursday raised interest rates for the third straight meeting to 5.00% from 4.75%, diverging from some regional peers, including Bank Indonesia and Bank of Thailand, which left their rates unchanged.

 

The Thai baht also fell sharply by 0.3% to 32.94 per dollar. Meanwhile, the Taiwan dollar rose 0.3% to 31.58 per dollar.

 

The South Korean won was up 0.2% to 1377.58 a dollar, hitting its highest level since September 2025 after the Bank of Korea delivered its second consecutive 25-basis-point rate hike to 3%. Robust semiconductor activity also bolstered the won, with the Bank of Korea upgrading its 2026 growth forecast to 3.3% from 2.6% on stronger chip exports. 

The Japanese yen struggled to extend gains despite joint intervention by the US and Japan, as Tokyo inflation firmed in August, adding fresh support to the case for another rate hike as soon as September. Headline CPI rose to 1.9% year-on-year in August, the highest level this year, from 1.8% in July. The yen was broadly steady against the dollar at 159.44 per dollar Friday.   

 

The Malayasian ringgit also rose 0.2% Friday and the Chinese Yuan was broadly steady against the dollar.  (Divya Moolayattil)

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India Rupee: Steady as RBI dlr sales offset impact of higher crude prices

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.5450	95.5100	95.5100	95.5550	95.5400

 

MUMBAI – The rupee was steady against the dollar as the Reserve Bank of India sold dollars, supporting the rupee in early trade Friday to square off the impact of the higher crude oil prices, dealers said. "There isn't much action happening now, but the RBI is definitely supporting the rupee," a dealer at a private sector bank said.

 

However, persistent dollar demand from importers is expected to keep up the pressure on the Indian unit, dealers said. If the rupee comes under pressure and approaches 95.60 per dollar, the RBI may come in aggressively, dealers said. 

 

Brent crude oil prices neared $90 per barrel after flare-ups between Russia and Ukraine, which weighed on the Indian unit. A wave of Ukrainian drones hit Russia Thursday, and in retaliation, Russia also carried out a massive strike against Ukraine overnight, targeting ports, grain storage, energy, industry and other infrastructure. Meanwhile, US President Donald Trump said he was not interested in resuming peace talks with Iran, which dampened hopes of a near-term end to the war and reopening of Strait of Homruz. Brent crude oil for November delivery was $88.24 per barrel, down from Wednesday's low of $85.32 per barrel. 

 

For the rest of the day, the rupee is expected to move in the range of 95.40-95.60 per dollar. Dealers see immediate technical support for the rupee at 95.50 a dollar.  (Divya Moolayattil)

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India Rupee: Expected range for rupee - Aug 28

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Public-sector bank	95.70	95.40
Private-sector bank	95.65	95.40
Private-sector bank	95.70	95.40
Private-sector bank	95.68	95.32
Foreign bank	95.60	95.35
Brokerage firm	95.65	95.40
Brokerage firm	95.60	95.40

 

 

 

 

 

 

 

 

 

 

 

(Divya Moolayattil)

 

End

 

US$1 = INR 95.3775

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

 

Edited by Rajeev Pai

 

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