Indian Rupee Trades Firm After RBI Holds Policy Rates Steady
- The rupee opened flat at 88.68 against the dollar after MPC kept policy rates unchanged and maintained a neutral stance.
- The currency has weakened over 5% in the past year due to US policy moves, trade tensions, capital outflows, and high gold imports.
- Exporters may sell between 88.75–88.80, importers may buy below 88.70, while crude oil prices remain near four-month lows amid oversupply concerns.
The Indian rupee opened flat on Friday morning after the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) decided to keep policy rates unchanged. The domestic currency started at 88.68 against the US dollar and slipped slightly to 88.72, according to Bloomberg. So far this year, the rupee has fallen 3.59% and touched an all-time low of 88.80 earlier this week.
On Thursday, the rupee was trading near 88.75 as markets awaited the RBI’s response to its recent weakness, noted Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. Over the past year, the rupee has weakened over 5%, pressured by global uncertainties, US policy moves, and trade tensions. Other factors such as capital outflows, high gold imports, and risk-averse sentiment have also weighed on the currency, Bhansali added.
Market participants are advised to consider selling cash exports between 88.75–88.80, while importers may buy below 88.70 for moderate hedging. Options strategies could also help manage volatility. “On a technical basis, momentum remains in favour of the dollar, with the rupee down 0.65% over the past month”, Bhansali said.
In its recent policy review, the MPC maintained a neutral stance while keeping the repo rate unchanged. RBI Governor Sanjay Malhotra said the effects of earlier monetary policy measures and recent fiscal steps are still playing out. The committee also revised India’s GDP growth forecast for FY26 upward to 6.8% while lowering the inflation forecast to 2.6%.
Governor Malhotra emphasized that the RBI does not target any specific rupee level but focuses on managing excessive volatility.
Meanwhile, the US dollar index ended a four-day losing streak amid reports that US President Donald Trump plans to lay off thousands of government workers during the ongoing shutdown. The index, which tracks the dollar against six major currencies, rose 0.07% to 97.91.
In commodity markets, crude oil prices edged higher but remained near four-month lows due to oversupply concerns. Brent crude rose 0.55% to $64.46 per barrel, while WTI crude increased 0.56% to $60.81 per barrel as of 9:10 AM IST.
