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Informist, Monday, Sept. 7, 2026

 

By Divya Moolayattil

 

MUMBAI – The rupee ended unchanged against the dollar for the second consecutive session Monday as public-sector banks sold dollars, likely on behalf of the Reserve Bank of India, keeping the currency range-bound, dealers said. However, higher crude oil prices amid US-Iran strikes weighed on the Indian currency, while dollar purchases by banks on behalf of importers also exerted pressure, they said.

 

"There was demand and supply. The RBI was supplying only as much as there was demand," a dealer at a private-sector bank said. "The intensity of the RBI's intervention will now depend on the global situation. Crude was mostly stable today. If crude falls below $75 per barrel, I think the Indian unit can appreciate to 93.50 per dollar."

 

The rupee rose to a high of 94.3650 per dollar before ending flat at 94.4850 per dollar. Asian currencies were mixed, with the Taiwan dollar the best performer and the Malaysian ringgit the worst.

 

The RBI has been supporting the rupee and keeping it range-bound for more than three weeks. The rupee appreciated nearly 1% last week after market sentiment turned positive amid robust inflows of $136.38 billion into the RBI's foreign currency swap scheme, significantly higher than the expected $90 billion-$100 billion.

 

Dealers said the RBI's intervention has effectively managed intraday volatility of the rupee amid robust inflows. The inflows boosted India's foreign exchange reserves to an all-time high of $740.80 billion as of Aug. 28.

 

The rupee also received support from foreign fund inflows linked to a slew of initial public offerings, with 16 companies looking to raise more than INR 17.90 billion this week. Banks sold dollars on behalf of foreign portfolio investors looking to invest in initial public offerings of Indian companies, dealers said.

 

Crude oil prices also rose Monday after the US and Iran exchanged attacks on ships in and around the Strait of Hormuz in recent days. Brent crude was up about 1% at more than $97 a barrel, which weighed on sentiment towards the rupee. Brent crude oil prices have risen 33% since the war in West Asia began at the end of February, choking shipments through the strait. 

 

The dollar remained under pressure despite rising expectations of a US interest rate hike, with geopolitical tensions in West Asia fuelling concern about increasing inflationary pressures, potentially prompting central banks worldwide to tighten monetary policy. At 1530 IST, the dollar index was at 98.94, against 99.00 Friday.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.4850	94.3900	94.3650	94.4900	94.4850
1-year dlr/rupee fwd (paise)	290.39	286.64	292.39	286.64	295.38

 

FORWARDS

The one-year dollar-rupee forward premium fell sharply as banks sold dollars in the forward market, dealers said. The premium had risen to a three-month-high Friday on reports that the RBI may conduct a dollar-rupee sell-buy swap auction to drain excess liquidity from the banking system.

 

Dealers said expectations of a dollar-rupee sell-buy swap have diminished after the RBI opted to absorb surplus liquidity through variable rate reverse repo auctions, prompting banks to sell forward dollars. The RBI had announced a 30-day VRRR auction Monday for a notified amount of INR 7.00 trillion, allowing banks to make a premature reversal of either part or the entire amount parked through the auction. The central bank also conducted another overnight VRRR auction. The auctions came as the RBI's net liquidity absorption--a proxy for surplus liquidity in the banking system--rose to INR 11.16 trillion Sunday, the highest since at least January 2019. 

 

At 1530 IST, the one-year exact-period dollar-rupee forward premium was 3.07%, down from 3.13% Friday. On an absolute basis, the premium was 290.39 paise, lower than 295.38 paise at Friday's close.

 

OUTLOOK 

Tuesday, the rupee is likely to track the dollar index as investors await US inflation data, due Friday, which could influence the dollar and the Fed's interest rate outlook. The Indian unit will also track crude oil prices and developments in West Asia as the US and Iran trade attacks to assert control over the Strait of Hormuz.

 

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. Traders will also keep an eye on the RBI's steps to drain excess liquidity from the system.

 

Dealers see strong technical support for the rupee at 94.50 per dollar. The rupee is expected to move in a range of 94.30-94.55 per dollar Tuesday.

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India Rupee - World FX: Dollar index falls despite rising rate hike bets

 

	AT 1430 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3534	1.3545	1.3506	1.3515
EUR/USD	1.1621	1.1637	1.1608	1.1618
NZD/USD	0.5882	0.5889	0.5867	0.5879
AUD/USD	0.7218	0.7225	0.7195	0.7198
USD/JPY	154.5330	156.2850	154.0620	156.2600
USD/CAD	1.3826	1.3841	1.3819	1.3836
EUR/JPY	179.5870	181.9640	179.2340	181.5800
CHF/USD	1.2353	1.2370	1.2329	1.2344
EUR/CHF	0.9407	0.9418	0.9402	0.9411

 

MUMBAI – The dollar index remained under pressure despite rising expectations of an interest rate hike in the US as geopolitical tensions in West Asia fuelled concern about increasing inflationary pressures, potentially prompting central banks worldwide to tighten monetary policy. At 1400 IST, the dollar index was at 98.85, down from 99.00 Friday.

 

An Iranian official said Tehran will declare a restricted zone near the Strait of Hormuz and announce a new shipping route agreed on with Oman for the waterway "in the coming days". Crude oil prices retreated slightly to $96 per barrel, down from $97.93 hit earlier Monday.

 

The euro rose marginally to $1.1629 as investors digested the far-right Alternative for Germany party's victory in Saxony-Anhalt and looked ahead to the European Central Bank's policy meeting later this week. The pound sterling rose 0.2% to $1.354.

 

The Japanese yen rose 1% to 154 per dollar after rising more than 2% last week, supported by growing expectations that the Bank of Japan will raise interest rates this month. The Canadian dollar also fell 0.3% to 1.385 per dollar.  (Divya Moolayattil)

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India Rupee: 1-yr premium fall as banks sell fwd dollars after VRRR auction

 

	AT 1330 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.4575	94.3900	94.3750	94.4675	94.4850
1-year dlr/rupee fwd (paise)	290.25	286.64	292.39	286.64	295.38

 

MUMBAI – The one-year dollar-rupee forward premium fell sharply Monday as banks sold dollars in the forward market, dealers said. The premium had risen to a three-month-high Friday on report that the Reserve Bank of India may conduct a dollar-rupee sell-buy swap auction to drain excess liquidity from the banking system.

 

Dealers said expectations of a dollar-rupee sell-buy swap auction have diminished after the RBI opted to absorb surplus liquidity through VRRR auctions, prompting banks to sell forward dollars. "The chances of a swap auction have come down after the RBI conducted VRRR auctions, so banks are selling forwards they bought Friday," a dealer at a private sector bank said.

 

The RBI had announced a 30-day variable rate reverse repo auction Monday for a notified amount of INR 7.00 trillion, allowing banks to make a premature reversal of either part or the entire amount of funds parked through the auction. The central bank also conducted another overnight VRRR auction. The auctions came as the RBI's net liquidity absorption--a proxy for surplus liquidity in the banking system--rose to INR 11.16 trillion Sunday, highest since at least January 2019. 

 

The benchmark US Treasury yield was at 4.78% Friday, up from 4.77% Thursday, also weighing on dollar-rupee forward premiums. US markets were shut Monday for the Labor Day holiday.

 

At 1332 IST, the one-year exact-period dollar-rupee forward premium was 3.07%, down from 3.13% Friday. On an absolute basis, the premium was 290.25 paise, lower than 295.38 paise at Friday's close.  (Divya Moolayattil) 

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India Rupee: Steady; RBI dlr sales, FX inflows offset rise in oil prices, dlr

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.4575	94.3900	94.3750	94.4600	94.4850

 

MUMBAI – The rupee erased some of its early gains and was broadly steady against the dollar on Monday as public sector banks sold dollars, likely on behalf of the Reserve Bank of India, dealers said. "There is not much movement in the market now because the RBI's flows are coming in," a dealer at a private sector bank said. The rupee moved in a tight range of just 9 paise Monday.

 

The RBI has been supporting the rupee and keeping it range-bound for more than three weeks. The rupee appreciated nearly 1% last week after market sentiment turned positive amid robust inflows of $136.38 billion into the RBI's swap scheme, significantly higher than the expected $90 billion-$100 billion.

 

The rupee also received support from foreign fund inflows linked to a slew of initial public offerings, with 16 companies looking to raise more than INR 17.90 billion this week. Banks sold dollars on behalf of foreign portfolio investors looking to invest in IPOs of Indian companies, dealers said.

 

However, the dollar index rose slightly on Monday after rebounding in the previous session, supported by a stronger-than-expected US jobs data that reinforced expectations of a Federal Reserve rate hike in September. Traders now see a 58% probability of a September Fed rate hike, up from roughly 50?fore the jobs report. At 1300 IST, dollar index was at 99.12, up from 99.00 Friday.

 

Oil prices also rose slightly on Monday after the US and Iran exchanged attacks on ships in and around the Strait of Hormuz in recent days. Brent crude was up about 1% at above $97 a barrel, weighing on sentiment toward the rupee.

 

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

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India Rupee: Inch up as mkt speculates RBI dlr sales; high oil prices weigh

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.3975	94.3900	94.3800	94.4525	94.4850

 

MUMBAI – The rupee rose slightly against the dollar Monday as dealers speculated that public sector banks sold dollars for the Reserve Bank of India. "94.50 (a dollar) is a crucial level now. The RBI has been protecting this level for some time now and I think it will be protected today (Monday) as well," a dealer at a public sector bank said.

 

However, the US and Iran traded strikes on ships in and around the Strait of Hormuz, sending crude oil prices above $97 per barrel. At 0930 IST, Brent crude oil for November delivery was at $97.02 per barrel, up from $96.28 Friday. 

 

The rise in the dollar index continued to weigh on the Indian unit. The index held above 99 on Monday after rebounding in the previous session, supported by stronger-than-expected US jobs data that reinforced expectations of a Federal Reserve interest rate hike in September. Traders see the probability of a September Fed rate hike to 58%, from roughly 50?fore the jobs report.

 

However, dealers said not much market activity is expected as the US foreign exchange market remains shut for the Federal Labour Day. For the rest of the day, the rupee is seen moving in a range of 94.30-94.50. Dealers see immediate technical support for the rupee at 94.50 a dollar. (Divya Moolayattil) 

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India Rupee: Expected range for rupee - Sept 7

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Public-sector bank	94.75	94.35
Private-sector bank	94.65	94.45
Private-sector bank	94.65	94.45
Foreign bank	94.70	94.40
Foreign bank	94.65	94.40
Brokerage firm	94.65	94.45
Brokerage firm	94.65	95.35

 

 

 

 

 

 

 

 

 

 

 

(Divya Moolayattil)

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India Rupee - Asia FX: Fall as oil prices, dlr rise; Philippine peso dn most

 

MUMBAI – Most Asian currencies fell in early trade as the dollar index held above 99 Monday after rebounding slightly in the previous session. The dollar index rose due to better-than-expected US job data that reinforced expectations of a Federal Reserve interest rate hike in September.

 

Data released Friday showed US nonfarm payrolls rose by 162,000 in August, following a revised increase of 23,000 in July and comfortably exceeding forecasts for a gain of 56,000. Meanwhile, the unemployment rate remained unchanged at 4.1%, while annual wage growth slowed to 3.1%, though the moderation was less pronounced than markets had expected.

 

Investors raised the probability of a September Fed rate hike to around 60%, from roughly 50?fore the jobs report. Market will focus on US inflation figures due this week for further clues on the central bank's policy path and direction of dollar index. At 0830 IST, the dollar index was 99.17, up from 99.00 Friday. 

 

The Philippine peso fell the most among regional peers Monday as higher crude oil prices and strong dollar put pressure on the currency. The peso was up 0.3% to 62.76 per dollar. 

 

The Japanese yen held near 156 per dollar on Monday after gaining more than 2% last week, supported by growing expectations that the Bank of Japan will raise interest rates this month.

 

The Thai baht and Taiwan dollar were down marginally at 32.90 and 31.62 per dollar Monday. The Chinese yuan fell by 0.2% to 6.71 per dollar after it hit the strongest level since three years Friday as strong PMI data reinforced expectations that China's economic recovery is gradually gaining traction.

 

Bucking the trend, the South Korean won rose marginally to 1,344.38 per dollar as banks sell dollars for exporters.  (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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