CHENNAI: The Indian rupee spent the week moving within a tight but slightly weak range against the US dollar, reflecting the dominance of global cues and sustained dollar demand in the domestic market. The currency hovered between Rs 88.50 and Rs 88.80 per dollar, with the upper end of the band continuing to act as a pressure point.
The week opened with the rupee around Rs 88.70 per dollar and it remained close to this level through most sessions. The Reserve Bank of India was seen stepping in at intervals—primarily through state-run banks—to limit any slide beyond the Rs 88.80 mark, a level that dealers now view as the central bank’s informal red line. Even so, importer demand for dollars and persistent portfolio outflows kept the currency from gaining any meaningful ground.
Global factors offered little relief. The dollar stayed firm as expectations of a near-term US rate cut faded, reducing risk appetite for emerging-market currencies. Despite India’s inflation dropping to multi-year lows in October, the data did not translate into currency strength, underlining how global conditions overshadowed domestic fundamentals.
The rupee’s daily movement continued to narrow, with traders noting that intraday swings have shrunk considerably in recent weeks. Market participants attribute this reduced volatility largely to the RBI’s steady presence in the market.
Looking ahead, the rupee is expected to stay in a narrow corridor unless there is a significant shift in global sentiment or foreign investment flows. Stronger FPI inflows or a softer dollar could offer support, while renewed risk aversion, higher importer demand or a further delay in US monetary easing could push the rupee back toward its record-low zone. For now, the currency appears set to consolidate, with the Rs 88.50–Rs 88.80 band likely to guide near-term trading.