Rupee Slips as RBI Intervenes to Check Pressure from Flows and Global Cues
The Indian rupee is likely to open weaker on Friday amid soft Asian market cues and persistent dollar demand, though traders say the Reserve Bank of India (RBI) continues to act as a crucial backstop. Forward market signals show the currency remains vulnerable to slipping past the 92-per-dollar mark, with opening levels seen around 91.90–91.96. The rupee touched a record low of 91.9850 on Thursday, pressured by dollar buying linked to non-deliverable forward (NDF) maturities and a structural gap between dollar demand and supply.
Market participants said RBI intervention helped prevent a sharper fall, with the central bank stepping in near the psychologically important 92 level. However, traders cautioned that the defence may not be aggressive going forward. The rupee has fallen around 2.3% so far this month, putting it on track for its worst monthly performance since September 2022. Rising dollar demand for bullion imports, steady equity outflows, and growing depreciation expectations have weighed heavily, while exporters’ reluctance to hedge has further tightened dollar supply.
External factors are adding to the pressure, as Asian currencies and equities weakened alongside U.S. equity futures following reports that the Trump administration may nominate Kevin Warsh as the next Federal Reserve chair. Oil prices are also emerging as a key headwind, heading for their strongest monthly rise in years amid escalating Middle East tensions linked to a potential U.S. strike on Iran, raising concerns for India’s import-heavy economy.
Pic courtesy: google/ images are subject to copyright
