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What is the story about?
The Indian rupee weakened 21 paise to 88.40 against the US dollar in early trade on Tuesday (October 28), pressured by month-end dollar demand from importers and a rise in global crude oil prices. The local currency hit its lowest level since October 14 before trimming some losses, with traders attributing the recovery to likely intervention by the Reserve Bank of India (RBI).
At the interbank foreign exchange market, the rupee opened at 88.34 and slipped to 88.40 per dollar, before last trading around 88.27. On Monday (October 27), it had settled 36 paise lower at 88.19.
Traders said dollar sales by state-run banks, possibly on behalf of the RBI, helped cap further weakness.
“USD/INR has been caught in a narrow range around 88.00, facing stiff resistance on the upside from intervention risks, while global dollar moves limit a relief rally in the rupee,” DBS analysts noted.
Market participants pointed to maturing positions in the offshore non-deliverable forwards (NDF) market as another factor weighing on the currency this week.
“Dollar bids spurred by NDF maturities are adding headwinds. Given the recent activity by the central bank, maturities are likely lined up nearly every day,” said a trader at a private bank.
CR Forex Advisors’ Managing Director Amit Pabari said the rupee may find resistance near 88.40, with support around 87.60–87.70. “A break below that zone could open the door for a move toward 87.20,” he added.
Meanwhile, the dollar index eased 0.12% to 98.66, though it remains on track for a monthly gain of nearly 1%. Brent crude futures rose marginally to $65.63 per barrel, keeping importers’ demand for dollars firm.
On the domestic front, benchmark equity indices traded higher, with the Sensex up 125.93 points at 84,904.77 and the Nifty rising 39.8 points to 26,005.85 in early deals.
Foreign institutional investors sold equities worth ₹55.58 crore on Monday, according to exchange data.
Investors are now awaiting the US Federal Reserve’s policy decision on Wednesday for direction. Markets are pricing in a 97.8% chance of a 25-basis-point rate cut, with another likely in December.
-With agencies inputs
At the interbank foreign exchange market, the rupee opened at 88.34 and slipped to 88.40 per dollar, before last trading around 88.27. On Monday (October 27), it had settled 36 paise lower at 88.19.
Traders said dollar sales by state-run banks, possibly on behalf of the RBI, helped cap further weakness.
“USD/INR has been caught in a narrow range around 88.00, facing stiff resistance on the upside from intervention risks, while global dollar moves limit a relief rally in the rupee,” DBS analysts noted.
Market participants pointed to maturing positions in the offshore non-deliverable forwards (NDF) market as another factor weighing on the currency this week.
“Dollar bids spurred by NDF maturities are adding headwinds. Given the recent activity by the central bank, maturities are likely lined up nearly every day,” said a trader at a private bank.
CR Forex Advisors’ Managing Director Amit Pabari said the rupee may find resistance near 88.40, with support around 87.60–87.70. “A break below that zone could open the door for a move toward 87.20,” he added.
Meanwhile, the dollar index eased 0.12% to 98.66, though it remains on track for a monthly gain of nearly 1%. Brent crude futures rose marginally to $65.63 per barrel, keeping importers’ demand for dollars firm.
On the domestic front, benchmark equity indices traded higher, with the Sensex up 125.93 points at 84,904.77 and the Nifty rising 39.8 points to 26,005.85 in early deals.
Foreign institutional investors sold equities worth ₹55.58 crore on Monday, according to exchange data.
Investors are now awaiting the US Federal Reserve’s policy decision on Wednesday for direction. Markets are pricing in a 97.8% chance of a 25-basis-point rate cut, with another likely in December.
-With agencies inputs
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