Rupee Steadies on Tariff Concerns, CPI Data Eyed

2026-01-09 02:46 By Joshua Ferrer 1 min. read

The Indian rupee steadied around 89.9 per USD, trading in a tight range as investors await upcoming inflation data for cues on policy outlook, while intensifying tariff concerns and equity outflows continued to weigh on the currency.

US President Donald Trump has greenlit a bipartisan sanctions bill that would allow tariffs of up to 500% on countries importing Russian oil, placing India, China, and Brazil in Washington’s crosshairs.

Republican Senator Graham noted the sanctions bill could reach a congressional vote as early as next week, keeping market uncertainty elevated.

The combined impact of the proposed tariffs, persistent foreign fund outflows, and RBI short forward positions kept pressure on the rupee, despite intermittent dollar sales by the central bank.

Meanwhile, December inflation data, due next week, are expected to rise for a second consecutive month to an annual rate of 1.5%, still marking eleven straight months below the Reserve Bank's 4% medium-term target.



News Stream
Indian Rupee Rebounds from Record Low
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Indian Rupee Steadies Amid RBI Support
The Indian rupee hovered around 96.2 per dollar, stabilizing after a nine-session slide as markets assessed central bank intervention and broader weakness in Asian currencies. Despite yesterday’s rebound, sentiment remained cautious, with traders expecting renewed pressure on the currency amid persistent dollar strength. Softer crude oil prices, however, offered some support to the rupee. Earlier, the Reserve Bank of India intervened aggressively through substantial dollar sales before markets opened and continued support throughout the trading session. Investors are now watching closely to see whether the RBI maintains its defense of the currency. Without sustained intervention, analysts expect importer and hedging demand for dollars to re-emerge, potentially limiting further gains. Meanwhile, most Asian currencies remained under pressure as the dollar index hovered near a six-week high, supported by resilient US economic data and elevated Treasury yields.
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Rupee Finds Relief as Oil Prices Ease
The Indian rupee hovered near 96.4 per dollar, pausing losses after briefly crossing the 97-per-dollar mark for the first time. Softer oil prices offered temporary relief as Brent crude fell more than 5% to near $105 per barrel, while the US 10-year Treasury yield slipped below 4.60%, improving market sentiment. The rupee had remained under pressure, falling nearly 2.5% over nine sessions amid strong dollar demand, rising US yields, and heavy foreign fund outflows. Meanwhile, the central bank has already announced a $5 billion dollar-rupee swap auction scheduled for May 26. The Reserve Bank of India is also reportedly considering measures to stabilize the rupee, including a possible rate hike, additional swap auctions, and schemes to attract foreign currency inflows from non-resident Indians, which officials estimate could bring in up to $50 billion. Markets are now focused on the RBI’s June 3–5 policy meeting for signals on further support measures.
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