The local currency opened at 90.2150 and rose to an intraday high of 90.09, supported by dollar offers from state-owned banks and a change in the way the daily fixed was quoted.The rupee ended 0.1% higher at 90.1650, compared to 90.2750 on Monday.
The determination reflects the premium or discount that bankers are willing to pay to buy or sell dollars at the Reserve Bank of India’s benchmark interest rate. This was offered at a discount on the day, compared to a premium during the most recent sessions.
A discount generally indicates greater interest in selling dollars at the RBI reference rate.
The rupee’s recent recovery is largely a tactical bounce, driven by the supply of foreign banking dollars and a cautious return of foreign inflows, said Dilip Parmar, forex research analyst at HDFC Securities. However, the currency remains vulnerable as the structural mismatch between the demand for dollars from importers and the limited supply persists. The trend remains neutral to bullish for the spot price as long as it remains above 89.90.
Demand for dollars from importers limited the local currency’s rise in each dip, despite dollar sales from state and foreign banks, traders said.
Asian cues were mixed for the rupee, with the dollar index extending its pullback from Monday, while Asian currencies remained within a range.
The focus this week is on a raft of US economic data, particularly the US jobs report due on Friday, to provide clues as to how often the Federal Reserve is likely to cut interest rates in 2026.
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