Indian Rupee Steadies Near Record Low

The Indian rupee hovered around 95.6 per dollar, steadying after gaining for three consecutive sessions as softer oil prices and continued RBI intervention limited downside, while traders remained cautious ahead of developments on US-Iran diplomacy. Brent crude hovered near a two-week low around $99.2 a barrel on hopes of a diplomatic resolution to the Middle East conflict, easing concerns over India’s energy import bill. State-run bank dollar sales and RBI spot intervention and FX swaps also helped contain losses. The central bank’s earlier policy measures have attracted about $133 billion through the diaspora deposit scheme, lifting FX reserves to a record high. However, foreign equity outflows remain a drag, with overseas investors selling $1.81 billion of Indian shares in September and $25.87 billion so far this year.

The Indian rupee hovered around 95.58 per dollar, extending gains for a third consecutive session as softer crude oil prices and lower long-dated US Treasury yields improved risk sentiment, while continued RBI intervention and large foreign currency inflows helped limit depreciation risks. India’s measures to strengthen its balance of payments have raised $143.6 billion, bolstering external liquidity and allowing the central bank to maintain a firm grip on rupee weakness. Brent crude was around $100 a barrel ahead of potential US-Iran talks at the UN General Assembly, keeping oil prices a key focus given their impact on India’s import bill and expectations for RBI rate hikes. Meanwhile, traders have raised bets on monetary tightening after the Fed and Bank of Japan raised rates last week, with markets pricing a 56% chance of a US hike in October. Importer hedging demand capped gains, with the rupee expected to stay within 95–96 ahead of the RBI decision.

The Indian rupee strengthened to around 95.86 per dollar, rebounding from seven-week lows as easing crude oil prices, expectations of foreign portfolio inflows linked to the National Stock Exchange’s $2.3 billion IPO and likely RBI intervention supported the currency. Brent crude fell for a third straight session to around $104.1 a barrel as hopes of alternative routes for Middle Eastern oil to reach markets outweighed supply concerns, while a modest retreat in US bond yields also provided relief. Traders expect sizeable foreign institutional investor demand for the NSE IPO, which closes for subscription on Monday. The rupee held near 96 per dollar on Thursday despite the Federal Reserve’s rate hike, recovering after likely RBI intervention and portfolio inflows linked to global equity index rebalancing. However, strong importer dollar demand and elevated oil prices remain headwinds, while the dollar stays above 100 following the Fed’s hawkish stance.