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Informist, Friday, Sept. 4, 2026

By Divya Moolayattil

MUMBAI – The rupee ended steady against the dollar as public-sector banks bought dollars on behalf of the Reserve Bank of India, offsetting demand for dollars from oil importers, dealers said. The rupee moved in a tight range of 5 paise Friday. 

"Nothing much happened in the market today," a dealer at a private-sector bank said. "No one was booking. Even the exporters were in wait-and-watch mode. They are waiting for the rupee to move toward 94.70 to hedge."

The rupee ended at 94.4850 per dollar, unchanged from Thursday's close. Most Asian currencies also remained steady against the dollar, with the South Korean won being the best performer and the Philippine peso being the worst.

Before the spot market opened Friday, the rupee was at 94.60 per dollar in the offshore non-deliverable forwards market. However, dollar sales by the central bank in the non-deliverable forwards market curbed the downward pressure, allowing the rupee to open steady at 94.4600 in the spot market, dealers said. 

Robust foreign inflows have strengthened the RBI's ability to manage pressure on the rupee, keeping importers on the sidelines as they expect the Indian currency to appreciate further, dealers said.

India's foreign exchange reserves rose to a record $729.3 billion in the week ended Aug. 28 and are expected to increase further as the inflows are absorbed. The RBI may not intervene aggressively at current levels as 94.50 per dollar appears to be a comfortable level for the central bank, a dealer at a public-sector bank said. The RBI may step up intervention only in case of extreme volatility triggered by any escalation in the war in West Asia or a sharp rise in crude oil prices, the dealer said.

Meanwhile, on the global front, US Federal Reserve Governor Christopher Waller said Thursday he was leaning towards keeping interest rates steady at the central bank's September meeting if August inflation cools further. The dollar index fell sharply after his comments, which supported the Indian unit in early trade. But the index recovered later in the day as market attention turned to key US non-farm payrolls data. At 1530 IST, the index was at 99.10, up from 99.00 Thursday.

The uncertainty surrounding the war in West Asia and higher crude oil prices continue to pose risks to the recent rise of the rupee. Brent crude oil for November delivery was at $95.39 a barrel, slightly lower than $95.52 Thursday. Brent prices remain around 7% higher than a week earlier.

FORWARDS

The one-year dollar-rupee forward premiums rose sharply to a three-month high as banks bought forward dollars heavily after reports that the Reserve Bank of India may conduct a dollar-rupee sell-buy swap auction to drain excess liquidity from the system. In the sell-buy swap, the RBI sells dollars to banks and receives rupees in the first leg of the transaction. This is reversed in the second leg on maturity.

Dealers said the RBI is likely to conduct a dollar-rupee sell-buy swap auction of $5 billion-$6 billion in a one-year tenure. At a meeting conducted by the RBI with bank officials Thursday regarding management of banking system liquidity, lenders are said to have proposed using foreign exchange sell-buy swaps to gradually withdraw excess rupee liquidity, dealers said.

The benchmark US Treasury yield fell slightly to 4.76% from 4.77% Thursday, which also supported the dollar-rupee forward premiums. At 1530 IST, the one-year exact-period dollar-rupee forward premium was 3.13%, up from 2.97% Thursday. On an absolute basis, the premium was 295.38 paise, against 280.63 paise at Thursday's close.

OUTLOOK

Monday, the rupee is likely to track crude oil prices and developments in West Asia. Market participants will watch the dollar index as investors focus on key US data, particularly non-farm payrolls and unemployment figures, due later Friday, which could influence the dollar and the Fed's interest rate outlook. A strong jobs reading could revive expectations of a rate hike, boosting the dollar. Weak data could mean interest rates remain unchanged, sending the greenback lower.

Dealers expect importers' dollar purchases to weigh on the rupee. However, the pace of dollar sales by the RBI will decide the rupee's direction.

Market participants will also track the RBI's measures to drain surplus liquidity from the system. The options under consideration include an incremental cash reserve ratio, dollar-rupee sell-buy swap auctions, and variable rate reverse repo operations. Dealers see strong technical resistance for the rupee at 94.20 per dollar. The rupee is expected to move in a range of 94.20-94.50 per dollar Monday.

India Rupee: One-year premiums at 3-month high as banks buy forward dollars

MUMBAI – The one-year dollar-rupee forward premiums rose sharply to a three-month high after banks bought forward dollars heavily after reports that the Reserve Bank of India may conduct a dollar-rupee sell-buy swap auction to drain excess liquidity from the system. In the sell-buy swap, the RBI sells dollars to banks and receives rupees in the first leg of the transaction. This is reversed in the second leg on maturity.

Dealers said the RBI is likely to conduct a dollar-rupee sell-buy swap auction of $5 billion-$6 billion in a one-year tenure. At a meeting conducted by the RBI with bank officials Thursday regarding management of banking system liquidity, lenders are said to have proposed using foreign exchange sell-buy swaps to gradually withdraw excess rupee liquidity, dealers said.

The benchmark US Treasury yield fell slightly to 4.76%, down from 4.77% Thursday, which also supported the dollar-rupee forward premiums. At 1500 IST, the one-year exact-period dollar-rupee forward premium was 3.13%, down from 2.97% Thursday. On an absolute basis, the premium was 295.63 paise, lower than 280.63 paise at Thursday's close.  (Divya Moolayattil) 

India Rupee: Steady as RBI remains active amid importers' dollar demand

MUMBAI – The rupee was steady against the dollar, moving in a narrow 5-paise range, as public sector banks sold dollars, likely on behalf of the Reserve Bank of India, offsetting dollar demand from oil importers, dealers said.

"There isn't much activity in the market now. Importers are there, but they are not aggressive, while the RBI is supplying dollars and ensuring that the 94.50 (a dollar) level is protected," a dealer at a private sector bank said.

Robust foreign inflows have strengthened the RBI's ability to manage pressure on the rupee, keeping importers on the sidelines as they expect the Indian currency to appreciate further, dealers said.

India's foreign exchange reserves rose to a record $729.3 billion in the week ended Aug. 28 and are expected to increase further as the inflows are absorbed. The RBI may not intervene aggressively at current levels as 94.50 per dollar appears to be a comfortable level for the central bank, a dealer at public sector bank said. The RBI may step up intervention only in case of extreme volatility triggered by an escalation in the West Asia conflict or a sharp rise in crude oil prices, the dealer said.

Dealers said the central bank could use the dollars to take delivery against its short forward dollar positions, instead of rolling them over, which may add pressure on the forward premiums and the rupee.

For the rest of the day, the rupee is seen moving in a range of 94.35-94.55. Dealers see immediate technical support for the rupee at 94.50 a dollar.  (Divya Moolayattil)

India Rupee: Technical levels for rupee - Sept 4

MUMBAI – At 1116 IST, the rupee was at 94.4825 a dollar. At 0900 IST, the rupee was at 94.4600 a dollar, against the previous close of 94.4850. Following are the key support and resistance levels for the rupee as provided by leading banks and a brokerage: 

(Divya Moolayattil)

India Rupee: Steady on RBI's active dollar sales; higher crude weighs

MUMBAI – The rupee was broadly steady against the dollar as public-sector banks sold dollars, likely for the Reserve Bank of India, dealers said. "The RBI came in the morning... I don't think the rupee will fall towards 94.50 (per dollar) because the RBI is protecting that level, and the rupee may probably trade range-bound today (Friday)," a dealer at a public sector bank said. Some dealers said the rupee may come under pressure due to the fix-related purchases, but expect it to stay in a tight range on Friday. 

Before the spot market opened on Friday, the rupee was trading at 94.60 per dollar in the offshore non-deliverable forwards market. However, dollar sales by the central bank in the NDF curbed the downward pressure, allowing the rupee to open steady at 94.4600 in the spot market, dealers said.

Higher crude oil prices, driven by uncertainty in the West Asia war, put pressure on the rupee in early trade. Brent crude oil for November delivery was at $96.00 a barrel, slightly higher than $95.52 on Thursday. Brent prices are around 7% higher than a week earlier.

A weaker dollar also supported the rupee Friday. The dollar index fell after Fed Governor Christopher Waller said he was inclined to hold interest rates steady later in September. At 0930 IST, the dollar index was at 99.05, down from Thursday's high of 99.61. 

For the rest of the day, the rupee is seen moving in a range of 94.35-94.55. Dealers see immediate technical support for the rupee at 94.50 a dollar.  (Divya Moolayattil) 

India Rupee: Expected range for rupee - Sept 4

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

(Divya Moolayattil)

India Rupee - Asia FX: Steady as dollar weakens on bets of Fed holding rates

MUMBAI – Asian currencies were broadly steady against the dollar in early trade Friday as investors scaled back expectations of a Federal Reserve rate hike this month. Fed Governor Christopher Waller said he was inclined to hold interest rates steady later in September, while the Japanese yen's strong rally weighed on the dollar index.

Market-implied odds for a rate hike at the September meeting dropped sharply following Waller's comments, with traders now pricing in just a 48.4% probability, down about 15 percentage points from Wednesday, according to the CME FedWatch tool. The dollar index was at 98.98 at 0830 IST, down from 99.00 Thursday. 

However, higher crude oil prices remained elevated amid geopolitical uncertainties, keeping pressure on regional currencies. Brent crude oil for November delivery was at $95.87 per barrel at 0840 IST, down from $95.52 Thursday. 

The Japanese yen strengthened to 155.25 per dollar, nearing the highs hit last month after central banks' intervention in July.

The Philippine peso rose the most among Asian peers, rising by 0.3% to 62.36 per dollar Friday. The peso recovered as investors take positions ahead of the release of August inflation data on Saturday. However, the peso has led losses in Asia so far this year, falling 6% to become the region's worst-performing currency. 

The South Korean won held gains in early trade after hitting a two-month high of 1355.88 Thursday. The Taiwan dollar, the Chinese yuan, and the Singapore dollar were broadly steady against the dollar Friday.  (Divya Moolayattil)

End

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

Edited by Rajeev Pai

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