The Indian rupee is expected to open stronger on Friday, with the 1-month non-deliverable forward (NDF) market indicating a range of 87.48–87.52 per U.S. dollar, compared to Thursday’s close of 87.7025. The move follows a sharp rally in the rupee during offshore trading hours, as traders unwound short positions after the Reserve Bank of India (RBI) defended a key exchange rate level.
The NDF market saw the 1-month USD/INR drop nearly 30 paisa within half an hour after local markets closed at 3:30 p.m. IST, and the decline held through the U.S. session. Despite the announcement of additional U.S. tariffs on Indian goods by President Donald Trump, the rupee traded in a narrow range during Thursday’s onshore session and posted modest gains — a reaction that traders attributed to RBI support.
Market participants suggested that the central bank has been actively intervening in the NDF market to prevent USD/INR from breaching the 87.95 mark. This defence, coupled with a recovery in Indian equities, likely prompted a wave of position unwinding by traders holding long dollar bets. A Singapore-based portfolio manager noted that “weak hands probably decided to exit.”
Indian stock indices erased intraday losses to end flat on Thursday, with analysts pointing to news of a planned U.S.-Russia presidential meeting as a possible catalyst. However, foreign investors remained net sellers, offloading around $600 million worth of shares according to preliminary exchange data.
Across Asia, most regional currencies edged lower, while the dollar index was little changed and on course for a weekly decline. Brent crude futures were steady at $66.4 per barrel, and the 10-year U.S. Treasury yield stood at 4.25%.
Key Indicators:
- One-month NDF at 87.59; onshore one-month forward premium at 10.75 paise
- Dollar index at 98.10
- Brent crude at $66.4/barrel
- Foreign investors sold $501.5 million worth of Indian shares and bought $38 million in Indian bonds on Aug. 6
