Indian rupee dips amid outflows, state banks cushion fall
The Indian rupee closed slightly weaker at 89.27 per U.S. dollar on Wednesday, pressured by portfolio outflows and routine hedging demand from importers. Intermittent dollar sales by state-run banks helped limit the decline.
While India’s benchmark equities, the BSE Sensex and Nifty 50, gained over 1%, global positive cues had little impact on the rupee. Traders noted that every dip in USD/INR was being bought, reflecting cautious market sentiment, News.Az reports, citing Reuters.
The rupee has fallen around 4% against the U.S. dollar and over 7% against the Chinese yuan this year, amid concerns over U.S. trade tariffs and trade flow imbalances.
Forward premiums for USD/INR rose slightly, with the 1-year implied yield at 2.21%, near a monthly high. Market attention now turns to the Reserve Bank of India’s policy decision on December 5, with Governor Sanjay Malhotra noting potential for further interest rate cuts.
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