INDIA RUPEE — Rupee faces pressure from oil, US yields; RBI deputy flags case for gains
By Jaspreet Kalra MUMBAI, Sept 24(Reuters) — The Indian rupee is set to encounter headwinds on Thursday from a renewed rise in oil prices and a broadly firmer dollar on account of growing US rate hike expectations, while central bank intervention is expected to limit losses. The rupee is expected to open around 95.85-95.87 per dollar, traders said, down from its close at 95.74 in the previous session. A stronger-than-expected US purchasing managers' report overnight fanned new price concerns and a poorly received auction of five-year Treasury notes triggered a fresh jump in yields. The 10-year US Treasury yield was up over 15 basis points from its closing level on Tuesday, while five-year yields rose above 5% for the first time since 2007. Brent oil prices, meanwhile, reclaimed the $100 per barrel mark even as Iran said it remained open to diplomacy to end the US-Iran war, though the two countries remain far apart on ways to do so. "The broader backdrop for Asia FX remains challenging," analysts at MUFG said in a note. "Currencies with limited exposure to the technology cycle and greater vulnerability to higher energy prices could come under renewed pressure." Foreign investors hav
By Jaspreet Kalra MUMBAI, Sept 24(Reuters) — The Indian rupee is set to encounter headwinds on Thursday from a renewed rise in oil prices and a broadly firmer dollar on account of growing US rate hike expectations, while central bank intervention is expected to limit losses. 74 in the previous session. A stronger-than-expected US purchasing managers' report overnight fanned new price concerns and a poorly received auction of five-year Treasury notes triggered a fresh jump in yields. The 10-year US Treasury yield was up over 15 basis points from its closing level on Tuesday, while five-year yields rose above 5% for the first time since 2007.
Brent oil prices, meanwhile, reclaimed the $100 per barrel mark even as Iran said it remained open to diplomacy to end the US-Iran war, though the two countries remain far apart on ways to do so. "The broader backdrop for Asia FX remains challenging," analysts at MUFG said in a note. 5 billion of Indian stocks and bonds so far this month. Fair Case For Inr Appreciation External pressures may have foreign investors looking past strength in India's economy, a deputy governor at the Reserve Bank of India said in a speech on Wednesday.
"The Indian economy has done exceptionally well... (but) there does remain some disconnect between this real economy narrative and parts of the financial markets, attributable in good measure to the pull of short-term returns in competing markets," said RBI Deputy Governor Poonam Gupta. "The current market dynamics do not appear especially well-founded. If anything, there seems to be a fair case for the rupee to not just stabilize but perhaps even appreciate from the current levels," Gupta said, noting that rupee weakness observed since March 2025 is a temporary phenomenon.
Over recent trading sessions, frequent interventions by the RBI have helped limit the local currency's fall near the 96 handle, traders said. com)