Post by : Badri Ariffin

On Tuesday, the Indian rupee opened with a steady tone, exhibiting minimal movement as persistent importer demand for dollars and mixed portfolio flows kept it within a narrow range. As of 9:50 a.m. IST, the rupee was trading at 88.65 against the U.S. dollar, a slight slip from Monday's closing value of 88.63.

For nearly two weeks, the currency has remained confined between 88.50 and 88.80, indicating robust trading activity. Traders noted that interventions by the Reserve Bank of India (RBI) to sell dollars have helped stymie significant depreciation, even amidst heightened dollar demand.

Domestic equity markets mirrored this cautious sentiment. The Sensex and Nifty 50 each fell by approximately 0.3% in early trading, yet fared better than broader Asian markets, where shares outside Japan dipped around 2% due to weak global risk appetite.

Foreign investors continued to be net sellers, pulling out $1.2 billion from Indian equities in November alone, bringing total outflows for 2025 to $17.2 billion. Market participants highlighted that a significant equity block deal on Tuesday put additional pressure on the rupee, although some foreign banks stepped in to offer dollars, countering the flow.

To add to the context, data released earlier this week showed India's merchandise trade deficit had surged to a record $41.68 billion in October, largely driven by a spike in gold imports and decreased exports to the U.S. This situation has kept currency traders vigilant, particularly with uncertain global cues.

The wider currency market also maintained a stable range, with the dollar index holding steady around 99.5. Most Asian currencies experienced declines of between 0.1% and 0.6% ahead of crucial U.S. economic releases this week, including the anticipated September nonfarm payrolls report on Thursday.

Despite fluctuations in global markets and domestic flows, traders believe the rupee is likely to remain within its established range, with limited potential for sharp movements as long as the RBI continues to engage at the upper end of the band.

#Global News