At ₹95.75 per dollar, $100 would cost ₹9,575, compared with ₹9,582 at Monday’s closing rate. This means the same $100 became ₹7 cheaper for Indian buyers at the opening.
However, importer hedging demand capped gains in the domestic currency.
Crude oil prices remain a key monitorable for the rupee, with Brent hovering around $100 per barrel ahead of potential US-Iran talks at the United Nations General Assembly this week. Oil prices are being closely watched for their impact on India’s import bill and amid expectations around possible rate hikes by the Reserve Bank of India (RBI).
India’s measures to strengthen its balance of payments have raised $143.6 billion, data released on Monday (September 21) showed. The inflows have helped the central bank keep a firm lid on expectations of further rupee depreciation.
The Federal Reserve and the Bank of Japan raised interest rates last week, while traders have also increased bets on policy tightening by the RBI.
A trader at a state-run bank said the rupee is likely to remain in the ₹95-96 range ahead of the RBI’s policy decision. The trader added that forward premiums may react more sharply than the spot rupee to any rate decision.
The RBI has been intervening frequently in the foreign exchange market to support the rupee, with traders expecting this to continue.
Analysts at Natixis expect the RBI to raise rates by 50 basis points by the end of 2026 to support the rupee.
Meanwhile, traders are pricing in a 56% chance of a US rate hike in October, up from 43.5% a week earlier, according to the CME FedWatch tool.
-With Reuters inputs