Rupee Slips 11 Paise To 95.55 Against Dollar On Strong US Currency, Weak Markets

The rupee gave up its early gains and ended the session down 11 paise at 95.55 (provisional) versus the US dollar on Thursday, reflecting a stronger greenback and subdued local markets.

Key Takeaways

• The rupee fell 11 paise to close at 95.55 against the US dollar on Thursday amid a stronger greenback and weak local markets.
• Brent crude slipped below $90 as Iran and Oman continued talks on a short-term Strait of Hormuz shipping route.
• The rupee opened at 95.50, hit an intraday high of 95.40, and closed 11 paise weaker than the previous settlement.
• India’s forex market was shut Wednesday for Id-e-Milad; the rupee had gained 26 paise on Tuesday.

Currency analysts noted that the dollar’s widespread strength overseas cancelled out any boost from falling oil prices.

Brent crude slipped under the $90 level for the first time in several sessions as Iran and Oman kept talking about a short‑term shipping route through the Strait.

Oil prices and market factors

Although no deal has been finalised, ongoing talks have eased worries about a lasting interruption to worldwide oil supplies, according to forex traders.

In the interbank FX market, the rupee opened at 95.50, reached an intraday high of 95.40, dipped to a low of 95.56, and closed at 95.55 (provisional) versus the dollar, 11 paise below its previous settlement.

On Tuesday, the rupee finished 26 paise stronger at 95.44 versus the US dollar.

India’s foreign exchange market remained shut on Wednesday due to Id‑e‑Milad.

Rupee Slips 11 Paise To 95.55 Against Dollar On Strong US Currency, Weak MarketsIANS

Fed outlook and rupee flows

Forex traders said investors will be watching closely the remarks of US Fed Chair Kevin Warsh at the Jackson Hole Symposium.

Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, said the rupee’s performance this month is essentially driven by flow dynamics.

“The special swap facility has drawn inflows of close to USD 73 billion as of August 21, with more than USD 65 billion coming from FCNR(B) deposits alone—about 2½ times the amount raised by the famed 2013 scheme. Given the surge toward the August 31 deposit deadline and the ECB window remaining open through December, we project total inflows under these programmes could reach USD 85‑90 billion,” Banerjee remarked.

These inflows have built a sizable war‑chest, leaving much of the rupee’s upside untapped, he noted, adding, “We anticipate a trading band of 95‑96, and a break below 95 could push the currency toward 94. We stay optimistic on the Indian rupee.”

Meanwhile, the dollar index, which measures the greenback versus a basket of six currencies, stood at 99.21, up 0.05 %.

Brent crude, the global oil benchmark, rose 0.61 % to USD 88.38 per barrel in futures trade.

On the domestic front, the Sensex slipped 539.35 points to close at 76,933.59, and the Nifty fell 116.90 points to 24,090.85.

Foreign institutional investors bought Indian stocks worth ₹502.63 crore on a net basis on Wednesday, exchange data showed.