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Indian rupee posts best week in seven months, fundamentals key for lasting turnaround

Дата публикации: 16-10-2026 11:22:12

MUMBAI: The Indian rupee rose 2% this week to post its biggest weekly gain in seven months, buoyed by policy measures aimed at boosting the currency, though analysts reckon a sustained turnaround hinges on an easing of underlying strains.
The Indian currency closed at 94.96 per dollar, up 0.1% on the day. It recovered after threatening to breach its record low of 96.96 hit last week.
Policymakers have moved to support the rupee by redirecting oil dollar demand away from the market, raising the cost of buying protection against a weaker rupee and slashing the limit for dollar purchases without underlying documentation proving exposures by 95% to $5 million.
Traders and analysts said that the measures are likely to sap depreciation pressure in the near to medium term, but a meaningful recovery without central bank interventions would require a broader shift in conditions.
“Our view is that, unless oil prices collapse, USD-INR faces upward pressure over time due to India’s wider current account eficit, inflation differential, lack of catalyst for portfolio inflows, and the RBI’s short FX forward position,” Joey Chew, head of Asia FX research at HSBC, said in a note.
“But we have also been thinking that the pair can be capped in the near term,” he said, adding that he expects the rupee to weaken to 96 by year-end and 98 by the end of 2027.
The Reserve Bank of India has used up about half of the more than $140 billion mobilised through special measures to bolster its FX war chest, and it’s net forward dollar liabilities stood at $200 billion at the end of August.
India’s merchandise trade deficit widened to $30.21 billion in September, up from $26.8 billion in August.
Investors have also warned that frequent FX rule changes to shore up the rupee risk undermining policy predictability and fragmenting currency market liquidity.
Elsewhere, the dollar index was down 0.3% at 101.7, while Asian currencies mostly rose between 0.1% and 0.7%.


Основное содержимое страницы с новостью.

MUMBAI: The Indian rupee rose 2% this week to post its biggest weekly gain in seven months, buoyed by policy measures aimed at boosting the currency, though analysts reckon a sustained turnaround hinges on an easing of underlying strains.

The Indian currency closed at 94.96 per dollar, up 0.1% on the day. It recovered after threatening to breach its record low of 96.96 hit last week.

Policymakers have moved to support the rupee by redirecting oil dollar demand away from the market, raising the cost of buying protection against a weaker rupee and slashing the limit for dollar purchases without underlying documentation proving exposures by 95% to $5 million.

Traders and analysts said that the measures are likely to sap depreciation pressure in the near to medium term, but a meaningful recovery without central bank interventions would require a broader shift in conditions.

“Our view is that, unless oil prices collapse, USD-INR faces upward pressure over time due to India’s wider current account eficit, inflation differential, lack of catalyst for portfolio inflows, and the RBI’s short FX forward position,” Joey Chew, head of Asia FX research at HSBC, said in a note.

“But we have also been thinking that the pair can be capped in the near term,” he said, adding that he expects the rupee to weaken to 96 by year-end and 98 by the end of 2027.

The Reserve Bank of India has used up about half of the more than $140 billion mobilised through special measures to bolster its FX war chest, and it’s net forward dollar liabilities stood at $200 billion at the end of August.

India’s merchandise trade deficit widened to $30.21 billion in September, up from $26.8 billion in August.

Investors have also warned that frequent FX rule changes to shore up the rupee risk undermining policy predictability and fragmenting currency market liquidity.

Elsewhere, the dollar index was down 0.3% at 101.7, while Asian currencies mostly rose between 0.1% and 0.7%.

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