Traders reported that the Indian Rupee ended Tuesday mostly unchanged, as persistent pressure on the currency was eased by expected central bank actions in both the local spot and non-deliverable forward markets.
Concerns over slow progress in US-India trade talks have weighed on the Rupee since high tariffs were implemented in late August, while strong Dollar demand from importers has continued.
The Rupee ended at 88.2650 against the US Dollar, almost unchanged from the previous session’s close of 88.2450, after dropping to a two-week low of 88.40 earlier in the session.
Five traders said the Reserve Bank of India likely stepped in to support the currency, with two noting that the central bank was active in both the spot and non-deliverable forward (NDF) markets, Reuters news agency reports.
A trader at a private bank said the central bank’s activity in the NDF market “appears to be quite strong but the upward pressure (on USD/INR) is likely to persist.”
Besides ongoing Dollar demand from domestic corporates, the trader noted that repayments of maturing NDF positions could also weigh on the Rupee in the near term.
Furthermore, India’s benchmark Nifty 50 slipped 0.1%, following losses in other regional markets.
The Dollar index remained steady on Tuesday, while the onshore Chinese Yuan closed at its strongest level since November 2024.
Investors are watching US President Donald Trump’s visit to Asia for potential progress in trade talks with China, as he is set to meet Chinese President Xi Jinping in South Korea on Thursday.
Optimism persists that Presidents Trump and Xi may reach a significant trade truce, with attention firmly on China’s potential imposition of strict controls on rare earth exports.