Rupee ends in the green on likely central bank support
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
The Indian rupee strengthened marginally to 87.53 a dollar Friday on likely intervention from the Reserve Bank of India (RBI), capping off a rough and tumultuous week punctuated with unexpectedly punitive tariffs on US-bound shipments from the country.Traders said sustained portfolio outflows and a significantly higher baseline tariff than anticipated earlier led to substantial weakness in the currency during the past two trading days.The rupee had closed at a record low of 87.59/$1 on Thursday.Through the choppy trading session, the first in the calendar month, the rupee had strengthened to 87.21 per dollar on the back of RBI's dollar sales, traders said. But continuous dollar demand from oil companies, foreign portfolio outflows from Indian equities, and a stronger dollar index pressured the rupee to close at 87.53/$1."The fall has been corroborated with a rise in the dollar index, a fall in Asian currencies and a fall in equities. The rupee looks vulnerable to global forces after Donald Trump's tariff announcement. Today, the RBI seemed to be the only entity selling dollars in the market," a trader with a public sector bank said.The dollar index rose to 100 on Friday and has been consistently strengthening during the week. It was at 97.6 at the start of the week.Traders expect the rupee to be under pressure on Monday, with the currency expected to trade near record lows, as the RBI's $5 billion dollar-rupee buy-sell swap is expected to mature on August 4. "The range for Monday is 87.25/$1 to 88/$1 with the central bank's $5-billion sold position coming up for maturity on August 4," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
3 minutes ago
- Indian Express
RBI Monetary Policy Meet LIVE: Repo rate likely to remain unchanged amid Trump tariffs uncertainty
RBI Repo Rate Cut, RBI Monetary Policy Meeting August 2025 Today Live Updates: The Reserve Bank of India's (RBI) six-member Monetary Policy Committee (MPC) is expected to announce its monetary policy — the third bi-monthly one for FY26 — today. Experts are of the view that the RBI Governor Sanjay Malhotra-led committee may keep the repo rate unchanged after slashing it by a bigger-than-expected 50 basis points (bps) in June. With a total cut of 100 bps between February and June this year, the repo rate currently stands at 5.5 per cent. FY26 inflation projection: The August policy announcement on Tuesday comes after the MPC meeting from August 4 to 6. It was held amid the ongoing rising uncertainties around trade tariffs triggered by US President Donald Trump as well as moderation in headline inflation. If it continues to frontload cuts, a 25 bps cut is not ruled out, say economists including State Bank of India's group chief economic advisor Soumya Kanti Ghosh. The MPC is also expected to revise inflation projection for FY26 downward. Further, the RBI may retain its forecast for real gross domestic product (GDP) growth for the current year. © IE Online Media Services Pvt Ltd
Time of India
3 minutes ago
- Time of India
RBI MPC Meeting August 2025 Live Updates: Will RBI governor Sanjay Malhotra cut repo rate? All eyes on GDP growth outlook amidst Trump's US tariff threats
07:42 (IST) Aug 06 Here's Bajaj Broking Research's view on key focus areas from RBI MPC Meeting: * After reducing the repo rate by a cumulative 100 basis points over the last three meetings—bringing it down from 6.5% in February to 5.5% in June—the committee is now widely expected to maintain the status quo. Most economists believe the MPC will keep both the repo rate and its neutral policy stance unchanged * Consumer Price Index (CPI) inflation eased sharply to 2.1% in June, well below the RBI's 4% target. However, rising core inflation, uneven monsoons, and wage pressures pose upside risks. The MPC may lower its FY26 inflation forecast but is likely to retain a cautious outlook, continuing to monitor emerging risks. The GDP growth projection for FY26 is expected to be left unchanged, indicating measured confidence in domestic demand resilience amid global headwinds * External factors such as recent US tariff hikes and rupee volatility further add to the uncertainty. With these risks in play, the RBI is expected to adopt a 'wait and watch' approach, refraining from additional easing until there is more clarity * Having already front-loaded rate cuts and ensured adequate liquidity, the MPC is likely to pause and allow time for the effects of previous measures to filter through the economy. Any further rate action—if deemed necessary—is anticipated only in October or beyond, once more data on festive demand, agricultural output, and global conditions is available. * Despite adopting a neutral policy stance, the Reserve Bank of India (RBI) has indicated that the Government may still cut the repo rate in the future if circumstances warrant. RBI Governor Sanjay Malhotra clarified after the June 2025 policy meeting that a neutral stance means interest rates can move either way depending on the evolving data. He stated, 'It will depend on how the data comes the growth is weaker, it can mean[the repo rate] will go down. If the growth is good, inflation is going up, the repo rate can go up'
Time of India
3 minutes ago
- Time of India
"I don't know anything about it": Trump on US imports of Russian chemicals and fertilizers
Donald Trump claimed ignorance about US imports of Russian chemicals and fertilizers. This followed India's assertion that the US continues to import these items. Trump also threatened to raise tariffs on India for buying Russian oil. India strongly rejected this, citing its energy security needs. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads US President Donald Trump on Tuesday (local time) stated that he had no knowlegde that the United States imports Russian Chemicals and fertilizers. The rebutall came after India claimed that US continues to import from Russia uranium hexafluoride for its nuclear industry,fertilisers, as well as asked by the about US Imports of Russian chemicals and fertilizers during a press conference at the White House, Trump said, "I don't know anything about it. We will have to check."ANI has reached out to the presidents press team and awaits for a comment came a day after the US President announced that the United States would "substantially raise" tariffs on India over its purchase of Russian oil."India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don't care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA. Thank you for your attention to this matter!!!" Trump had said in a post on Truth Social on US President's statement was strongly rejected by India, with the Ministry of External Affairs calling the targeting of India "unjustified and unreasonable."In a detailed response, India said its imports from Russia were based on market needs and energy security, especially after Western nations diverted traditional supplies to Europe following the Ukraine conflict."In fact, India began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict. The United States at that time actively encouraged such imports by India for strengthening global energy markets stability. India's imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by global market situation. However, it is revealing that the very nations criticizing India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion," the statement government also pointed to continued trade between Russia and both the United States and the European Union."Where the United States is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers, as well as chemicals. In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security," the statement said," the MEA statement's also noted that the EU's bilateral trade with Russia in 2024 reached Euro 67.5 billion in goods, along with 16.5 million tonnes of LNG, more than its own trade volume with said it will take all necessary steps to safeguard its national interests and economic security.
