India Rupee Review
Down at over 4-month low on rise in crude, heavy dollar demand
This story was originally published at 16:55 IST on 7 October 2026
Register to read our real-time news.Informist, Wednesday, Oct. 7, 2026
By Divya Moolayattil
MUMBAI – The rupee fell sharply against the dollar, hitting an over four-month low during the day as a rise in crude oil prices and a strong dollar index weighed on the Indian currency amid escalating tensions in West Asia, dealers said. Aggressive dollar demand from importers and foreign portfolio investors also added to the pressure. The rupee weakened despite likely intervention by the Reserve Bank of India, with state-owned banks seen selling dollars in the spot market. The rupee hit a low of 96.85 a dollar, just 11 paise shy of its all-time low.
"The (RBI MPC's repo rate) hike was expected and is small relative to the oil shock. The rupee follows dollar flows, and those are still running out. Crude above $100 a barrel keeps oil importer dollar demand heavy, and 25 bps (hike in repo rate) doesn't change the import bill or bring back FPI money on its own," said the head of treasury at a foreign bank.
After hitting a high of 96.33 a dollar in early trade, the rupee settled at 96.7750 a dollar Wednesday, down 0.4% from the previous close. The Indian unit moved in a wide range of 52 paise, the highest volatility seen in a day in three months. All Asian currencies fell against the dollar, barring the Indonesian rupiah. The Thai baht was the worst performer Wednesday, followed by the Indian rupee.
The Indian unit traded slightly higher briefly in early trade. But losses for the rupee began as banks started purchasing dollars aggressively for foreign portfolio investors, who were looking to exit Indian equities. The Nifty 50 and the Sensex closed 0.8% and 0.6% lower, respectively, on Wednesday. FPIs have pulled out nearly $1.38 billion in just two days in October. So far in 2026, they have net withdrawn $23.65 billion from Indian markets, more than double the $10.92 billion withdrawn in the whole of 2025.
Dollar demand from importers, who feared further rise in crude oil prices, also weighed on the Indian unit. Brent Crude oil futures rose to over $101 a barrel, after falling to as low as $97 earlier in the session, following reports of fresh Iranian-backed Houthi attacks on Saudi energy infrastructure. Houthi forces launched missiles at Riyadh's international airport, an oil refinery and other sites in Saudi Arabia. At 1530 IST, Brent crude for December delivery was at $101.74 a barrel, down from $100.58 Tuesday.
There was no impact of the RBI's repo rate hike as the decision was in line with market expectations, dealers said. The change in stance to "calibrated tightening" was partly expected by the market. The RBI's Monetary Policy Committee raised the policy repo rate by 25 basis points to 5.50% Wednesday, the first increase in more than three years.
"The MPC outcome on the rate hike was in line with market expectations. Though most people did not expect the stance change, the markets had built in a clear hawkish tone in the price and thus the MPC outcome did not see any substantial move in the markets," head of treasury at Federdal Bank, Lakshmanan V, said in a note.
The dollar edged higher on Wednesday, buoyed by rising oil prices, while investors awaited minutes of the Federal Reserve's last meeting, due later in the day, and remarks from policymakers for signals on a potential rate hike. The dollar index, which measures the greenback against a basket of currencies, rose to 102.27 from 100.58 Tuesday. The yield on the 10-year US Treasury note steadied around 5.31% on Wednesday, remaining near 24-year highs, adding to the woes for the rupee.
However, dollar sales by the RBI through state-owned banks prevented the rupee's fall towards its all-time low, while some dealers said lack of active intervention by the RBI led to sharp depreciation of the Indian unit.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 96.7750 | 96.4200 | 96.3300 | 96.8500 | 96.4200 |
| 1-year dlr/rupee fwd (paise) | 372.40 | 342.40 | 372.40 | 340.30 | 333.23 |
FORWARDS
The one-year dollar-rupee forward premium rose to an over four-year high Wednesday as the RBI conducted sell-buy swaps of up to one year to absorb surplus rupee liquidity from the banking system, dealers said. The one-month dollar-rupee forward premium rose the most among maturities of up to one year, by 108 basis points, to 5.40%. The RBI's net liquidity absorption, a proxy for surplus liquidity in the banking system, stood at INR 4.99 trillion Tuesday, down from INR 5.3 trillion Monday.
The RBI has been conducting foreign exchange sell-buy swaps for more than three weeks, dealers said. Under a sell-buy swap, the RBI sells dollars for immediate delivery and simultaneously buys them for delivery at maturity, thereby absorbing rupee liquidity from the banking system.
Some dealers said widening of the US-India interest rate differential after the MPC raised the policy repo rate by 25 basis points to 5.50% also supported the rise in forward premiums. The US Federal Reserve had raised its benchmark interest rate by 25 bps to a target range of 3.75%-4.00% in September.
The one-year exact-period dollar-rupee forward premium was 3.82%, higher than Tuesday's close of 3.46%. On an absolute basis, the premium was 372.40 paise, against 333.23 paise Tuesday.
OUTLOOK
On Thursday, the rupee will continue to take cues from movements in crude oil prices amid evolving developments in West Asia, dealers said. The Indian currency will also continue to take cues from movements in the dollar index, they said.
"The rupee is likely to remain under pressure with elevated volatility, with the range seen between 96.45–97.25," Jateen Trivedi, vice-president and research analyst, commodity and currency, at LKP Securities, said.
Dealers see strong technical support for the Indian currency at 96.90 per dollar. The rupee is likely to move in a range of 96.40-96.90 against the dollar Thursday.
India Rupee - World FX: Dlr index up as crude rises; mkt eyes FOMC minutes
| AT 1417 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3242 | 1.3276 | 1.3230 | 1.3268 |
| EUR/USD | 1.1196 | 1.1263 | 1.1180 | 1.1258 |
| NZD/USD | 0.5607 | 0.5626 | 0.5602 | 0.5620 |
| AUD/USD | 0.6971 | 0.6984 | 0.6964 | 0.6982 |
| USD/JPY | 158.1230 | 158.5090 | 157.8570 | 158.0730 |
| USD/CAD | 1.4222 | 1.4232 | 1.4207 | 1.4206 |
| EUR/JPY | 177.0390 | 178.3078 | 176.5520 | 178.0500 |
| CHF/USD | 1.2002 | 1.2033 | 1.1994 | 1.2017 |
| EUR/CHF | 0.9328 | 0.9370 | 0.9311 | 0.9364 |
India Rupee - World FX: Dlr index up as crude rises; mkt eyes FOMC minutes
MUMBAI - The dollar index rose sharply as elevated crude oil prices increased the safe haven demand for the greenback. At 1418 IST, Brent crude oil futures for December delivery were at $100.93 per barrel, while the dollar index was at 102.26. Markets awaited the release of the minutes of the US Federal Open Market Committee's September policy meeting, wherein it had raised interest rates by 25 basis points, for further cues.
The euro fell 0.6% against the dollar to 1.1197. The euro was also dragged down after data released Tuesday showed German industrial orders in August fell sharply by 10.6% on month. The Canadian dollar also fell against the dollar to 1.422.
The Swiss franc slipped to 0.833 per dollar, while the pound sterling fell to 1.324 per dollar as a rise in Brent crude oil prices weighed on market sentiment amid rising inflationary pressures. The Japanese yen fell to its lowest level in nearly two weeks and was traded at 158.42 per dollar. (Nandini Sinha)
India Rupee: 1-year premium at six-month high on RBI's likely FX swaps
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| AT 1350 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 96.7325 | 96.4200 | 96.3400 | 96.8500 | 96.4200 |
| 1-year dlr/rupee fwd (paise) | 364.70 | 342.40 | 367.20 | 340.30 | 333.23 |
MUMBAI – The one-year dollar-rupee forward premium rose to a six-month-high Wednesday as the Reserve Bank of India conducted sell-buy swaps of up to one year to absorb surplus rupee liquidity from the banking system, dealers said. The one-month dollar-rupee forward premium rose the most among maturities of up to one year, by 75 basis points, to 5.03%. The RBI's net liquidity absorption, a proxy for surplus liquidity in the banking system, stood at INR 4.99 trillion Tuesday, down from INR 5.3 trillion Monday.
The RBI has been conducting foreign exchange sell-buy swaps for more than three weeks, dealers said. Under a sell-buy swap, the RBI sells dollars for immediate delivery and simultaneously buys them for delivery at maturity, thereby absorbing rupee liquidity from the banking system.
Some dealers said the widening in the US-India interest rate differential after the RBI MPC raised the policy repo rate by 25 basis points to 5.50% also supported the rise in forward premiums. The US Federal Reserve had raised its benchmark interest rate by 25 bps to a target range of 3.75%-4.00% in September. "There is wild paying across all tenures. They started hitting in the morning itself. Also, after the rate hike today, our interest rate differential with the US rates has improved," a dealer at a public sector bank said.
The rupee fell sharply to 96.8500 a dollar Wednesday, just 11 paise short of its all-time low, as dollar demand from importers and foreign portfolio investors surged. The lack of active RBI intervention also contributed to the sharp fall in the Indian currency.
The one-year exact-period dollar-rupee forward premium was 3.74%, higher than Tuesday's close of 3.46%. On an absolute basis, the premium was 364.70 paise, against 333.23 paise Tuesday. (Divya Moolayattil)
India Rupee: Erases gains on rise in crude, dlr buys; RBI decision priced in
| AT 1035 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 96.5275 | 96.4200 | 96.3300 | 96.4800 | 96.4200 |
MUMBAI – The rupee erased gains against the dollar as banks bought dollars likely on behalf of importers amid a rise in crude oil prices. Brent crude oil recovered to $101 a barrel after it fell to $97 in the previous session as investors assessed the escalations in tensions around the Strait of Hormuz.
The rupee shrugged off the Reserve Bank of India's repo rate hike as the move was priced in and investors shifted their focus on the rising geopolitical tensions. The RBI's Monetary Policy Committee raised the policy repo rate by 25 basis points to 5.50%, the first increase in more than three years. The rate-setting panel's decision was largely in line with expectations. The change in stance to "calibrated tightening" was seen as positive for the rupee.
"Rate hike and change in stance to calibrated tightening is positive for our currency. The rate hike was already discounted, but the market will take time to observe and then react to the change in stance," a dealer at a public sector bank said.
However, foreign fund outflows continued to weigh on the rupee, along with the pressure from a stronger dollar index. At 1050 IST, Nifty 50 and the Sensex were down 0.4% and 0.2%, respectively. Foreign portfolio investors withdrew over $6.5 billion from the domestic market in September, the highest monthly outflow in six months, and pulled out nearly $1.38 billion in just two days in October. So far in 2026, they have net withdrawn $23.65 billion from Indian markets, more than double the $10.92 billion withdrawn in the whole of 2025.
Dealers said dollar sales by some public sector banks, likely on behalf of the Reserve Bank of India, limited the rupee's losses. The central bank sold dollars at multiple levels to contain volatility in the currency market, dealers said.
For the rest of the day, the rupee is expected to move in a range of 96.30-96.60 a dollar. Dealers see immediate technical support at 96.60 a dollar. (Divya Moolayattil)
India Rupee: Rises as mkt speculates RBI's dlr sales ahead of MPC decision
| AT 0930 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 96.3425 | 96.4200 | 96.3300 | 96.4550 | 96.4200 |
MUMBAI – The rupee rose slightly against the dollar as dealers speculated that some public sector banks sold dollars, likely for the Reserve Bank of India ahead of the outcome of the RBI's Monetary Policy Commitee meeting at 1000 IST, dealers said.
They said the rupee may trade in a tight range of just 10 paise till MPC's policy decision. The dealers expect the movement of the rupee during the day to be decided by the RBI MPC's tone for future guidance. "There isn't much happening now. Movement will be seen after 10 (1000 IST). The RBI's statement will decide the volatility in the market," a dealer at a public sector bank said.
Brent crude futures for December rose above $101 a barrel after falling as low as $97.06 earlier in the session, which will weigh on the currency. Crude oil prices rose after escaltion in war around the Strait of Hormuz. The dollar index also recovered above 102 level due to safe-haven demand and rise in US Treasury yields. The index was at 102.03, up from 101.85 Tuesday.
However, any sharp appreciation will be limited as banks may buy dollars for importers and foreign portfolio investors at every dip in dollar-rupee pair. For the rest of the day, the rupee is expected to move in a range of 96.35-96.50 a dollar. Dealers see immediate technical support at 96.50 a dollar. (Divya Moolayattil)
India Rupee - Asia FX: Most down on higher dollar index, crude prices
MUMBAI – Most Asian currencies fell against the dollar in early trade Wednesday as demand for the safe haven rose following higher Brent crude oil prices and elevated US Treasury yields. At 0740 IST, Brent crude oil contract for December delivery was $101.54 per barrel, up from $100.58 per barrel Tuesday.
The Indonesian rupiah was the only Asian currency to strengthen against the dollar, at 17,905 per dollar. Market participants await key domestic data this week, including September foreign exchange reserves.
At 0740 IST, the dollar index stood at 102.01 as demand for the safe haven remained intact. Markets also await the release of the minutes of the US Federal Reserve's September policy meeting, when it raised interest rates by 25 basis points for the first time in three years.
The Philippine peso slipped 0.3% to 62.77 per dollar, while the Japanese yen and the Taiwanese dollar fell 0.2?ch to 158.34 per dollar and 31.85 per dollar, respectively. The South Korean won also fell to 1,339.40 per dollar.
The Chinese yuan also weakened against the greenback to 6.639 per dollar, while the Thai baht fell to 33.63 a dollar. (Nandini Sinha)
India Rupee: Expected range for rupee - Oct 7
MUMBAI – Following are the support and resistance levels expected for the rupee Wednesday, as forecast by leading banks and brokerages in an Informist poll:
| PARTICIPANT | SUPPORT | RESISTANCE |
| Public-sector bank | 96.50 | 96.00 |
| Private-sector bank | 96.50 | 96.00 |
| Private-sector bank | 96.50 | 96.00 |
| Private-sector bank | 96.75 | 95.90 |
| Foreign bank | 96.50 | 96.00 |
| Brokerage firm | 96.55 | 96.22 |
| Brokerage firm | 96.50 | 96.10 |
(Divya Moolayattil)
End
US$1 = INR 96.7750
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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