The rupee falls due to rate concerns and outflows cushion the impact of RBI intervention

The Indian rupee finished lower on Thursday after a choppy session as the Reserve ⁠Bank of India’s new surprise intervention was offset by concerns over rates and an outflow from equities.The currency, which opened at 89.95, recovered to 89.75 after the RBI intervened for the second day in a row, bankers said. The price eventually ended at 90.0175, after closing at 89.88 on Wednesday.

“Market movements are once again dominated by one big player, and the currency changes direction based on the presence or absence of RBI,” said a trader at a foreign bank.

Earlier in the day, bankers had said they doubted the sustainability of the rupee’s recovery from 90.30 to 89.75. Taking a hit on Tuesday, they advised importers to hedge against the strength of the rupee.

“The combined effect of the US’s proposed 500% tariffs, the decline in equity markets and the RBI’s short forward positions kept pressure on the rupee at all times even as the RBI stepped in intermittently to sell dollars,” said Anil Bhansali, head of finance at Finrex Treasury Advisors.

“Rupee premiums have started rising again as importers bought and paid forward positions on their import positions.”

Stock markets tumbled for the fourth day in a row, with the Nifty 50 Index down 1% amid foreign outflows on rising concerns over US import tariffs and sell-offs in export-oriented companies. US President Donald Trump will allow a bipartisan sanctions bill targeting countries doing business with Russia to move forward in Congress and could be voted on as soon as next week, Republican Senator Lindsey Graham said. on Wednesday.

Immediate attention will turn to the closely watched US non-farm payrolls report, due after Indian market hours on Friday. The data is expected to provide new clues about the labor market and the Federal Reserve’s policy trajectory through 2026.