Rupee poised to track weaker Asia in risk-off mood; RBI intervention in play

FILE PHOTO: A customer holds hundred rupees Indian currency notes near a roadside currency exchange stall in New Delhi, India, May 24, 2024. REUTERS/Priyanshu Singh/File Photo · Reuters

By Nimesh Vora

Tue, 17 February 2026 at 11:55 am GMT+9 2 min read

In this article:

INR=X

+0.03%

By Nimesh Vora

MUMBAI, Feb 17 (Reuters) - The Indian rupee is set to open weaker on broad risk aversion and softer Asian peers, while markets ‌look for signs of central bank action to prevent a break ‌past a psychological threshold.

The 1-month non-deliverable forward indicated the rupee will open in the 90.78-90.82 range ​versus the U.S. dollar, having settled at 90.65 on Monday.

The local currency has traded in a narrow range over the past two sessions, lacking clear directional bias. Whenever the rupee inches higher, sufficient dollar demand from importers and speculative accounts emerges, ‌while declines are met ⁠with caution amid fears that the Reserve Bank of India could intervene.

The caution stems from the central bank’s surprise dollar sales ⁠before local market opened last week to push rupee higher, prompting expectations that the RBI will lean against any breach of 91.

Foreign investors returning to selling in Indian ​equities ​over the past two sessions is adding ​to pressure on the rupee. Meanwhile, ‌bankers continue to flag regular dollar demand from oil companies and NDF-linked maturities.

“Unless we see a decisive break of sort of key levels, it’s largely flow-driven trade with the RBI in the backdrop,” a Mumbai-based FX trader said.

“If 91 gives way, we could see a quick extension higher. However, the market is ‌wary of pushing too hard.”

The rupee will have ​to contend with India’s merchandise trade deficit widening ​to a three-month high of $34.68 ​billion in January and the wider-than-expected goods trade deficit driven ‌by a rise in gold and ​silver imports.

ASIA STRUGGLES, US ​EQUITY FUTURES SLIDE

Asian currencies and shares dropped. Futures indicated that U.S. equities will open lower when they resume trading on Tuesday.

Markets are awaiting signals ​later this week on ‌the potential timing of the Federal Reserve rate cuts, with minutes ​from the Fed’s last meeting and advance U.S. GDP figures due.

(Reporting ​by Nimesh Vora; Editing by Janane Venkatraman)

Terms and Privacy Policy

Privacy dashboard