Business & Economy
Rupee Falls Below 96 Intraday Before RBI-Linked Dollar Sales Halt Slide
Seven-day losses ended, but pressure from outflows and oil remains
Seven-day losses ended, but pressure from outflows and oil remains
The ’s slide past 96 showed how quickly external pressures can overwhelm sentiment in India’s currency market. A stronger dollar, persistent , firm oil prices and the ’s tighter stance all fed demand for dollars, while support helped slow the fall and calm trading. The recovery signaled that intervention can steady the market, but it did not erase the broader strain on importers and traders.
The finished the session at 95.89, up 2 , after the recovery from its worst levels of the day. That close snapped the , but the currency still ended weaker than earlier in the month, leaving importers, exporters, and traders focused on whether the would keep smoothing volatility.
Banks sold dollars on behalf of the RBI, helping the rupee recover from its intraday low and touch about 95.78. Market reports said this helped steady trading after the breach of 96, showing how can quickly change intraday direction even when broader pressure remains.
At the open, the rupee slipped below the for the first time since late July and fell to an of 96.10 per dollar. Traders linked the move to the Fed shock, persistent dollar demand, foreign outflows, and firm oil prices, which together overwhelmed early trading sentiment.
The U.S. raised rates by , its first increase since 2023, and signaled tighter policy ahead. That move strengthened the dollar and intensified pressure on , including the rupee, which remained under stress from capital outflows and high crude prices.
The rupee weakened for a sixth straight session and then a seventh, ending around 95.88 to 95.95 as foreign fund outflows, rising , and a stronger dollar weighed on sentiment. Reports said the currency had already moved through a of more than 1%, making the market highly sensitive to any new global shock.
The rupee faced additional strain as oil prices and U.S. yields stayed elevated, while traders said the was likely using to manage . Market reports described the currency as on course for its sharpest weekly drop in four months, showing that the was already broadening before the Fed shock.
The rupee had already weakened sharply in the first week of September, falling from 94.43 on September 4 as , , and a kept pressure on the currency. By mid-September, the weakness had stretched into a run of consecutive losses, setting up the later test of the 96 level.