The Indian rupee slipped to a little over 90 per dollar on Thursday, even after the Reserve Bank of India (RBI) stepped in to sell dollars for the second day in a row.
RBI Intervention and Rupee Movement
The currency opened at 89.95, rose to 89.75 when the RBI sold dollars, but later fell back and closed at 90.0175. Traders say the rupee’s direction is now heavily influenced by whether the RBI is active in the market.
Why Tariffs and Stock Market Drops Added Pressure
U.S. plans to impose 500% tariffs on certain imports, a falling Indian stock market, and the RBI’s short forward positions kept the rupee under pressure. Importers bought forward contracts to lock in rates, pushing premiums higher.
Impact on Importers and Investors
- Importers: They are being advised to hedge against a stronger rupee, which could raise the cost of overseas purchases.
- Investors: A weaker rupee can affect returns on Indian assets and may lead to more foreign outflows.
Looking Ahead
All eyes are on the U.S. non‑farm payroll report due after Indian market hours on Friday. The data will give clues about the U.S. labor market and the Federal Reserve’s policy direction for 2026.
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any decisions.