The rupee traded in a narrow range and fell 3 paise to 95.97 against the U.S. dollar in early trade on Wednesday (September 30, 2026), pressured by persistent dollar demand from state-run oil marketing companies and firm crude oil prices.

Dollar sales by state-run banks on behalf of the Reserve Bank of India in both spot and forward markets are restricting the USD/INR pair under the 96.00 level.

Additionally, foreign portfolio outflows of around $2.2 billion this month and firm U.S. yields are keeping the pressure on the USD/INR pair.

At the interbank foreign exchange market, the rupee opened at 95.87, then fell to 95.97 against the U.S. dollar, registering a fall of 3 paise from its previous close.

On Tuesday (September 19, 2026), the rupee settled marginally higher at 95.94, just a tad over the psychologically important 96 per dollar level.

“The Reserve Bank has been an active presence — dealers report state-run bank dollar sales, and the $14.9 billion fall in reserves to $766 billion in the latest week is consistent with sizeable intervention — while portfolio outflows of around $2.2 billion this month and firm U.S. yields keep the pressure on,” said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.40, higher by 0.04%.

Brent crude, the global oil benchmark, was trading higher by 0.82% at $103.43 per barrel in futures trade.

On the domestic equity market front, the Sensex rose 190 points to 72,733.04 in early trade, while the Nifty was up 22 points to 22,735.20.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹9,980.22 crore on a net basis on Tuesday (September 29, 2026), according to exchange data.

The rupee gained 5 paise to 95.57 against the U.S. dollar in early trade on Wednesday (September 23, 2026), supported by falling crude oil prices and a broader recovery in Asian currencies.

Forex traders said going ahead, the currency market direction will majorly be driven by unfolding geopolitical developments.

Softer crude oil prices remain the major support for the rupee, while a firm American currency after the US Fed’s rate hike and foreign portfolio outflows remain the main concerns.

At the interbank foreign exchange market, the rupee opened at 95.58 and then touched 95.57 against the American currency, registering a gain of 5 paise from its previous close. On Tuesday (September 22, 2026), the rupee had settled at 95.62 against the U.S. dollar.

“We see 96.30 as the upper cap, with strong Reserve Bank intervention expected as the pair approaches 96.30–96.50, and support at 95.50 and then 95.00. Softer crude remains the rupee’s clearest support, with a firm dollar after the Fed’s hike and foreign portfolio outflows the main offsets,” said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.70, higher by 0.10 per cent.

Brent crude, the global oil benchmark, was trading lower by 0.99% at $98.27 per barrel in futures trade.

On the domestic equity market front, the Sensex climbed 283.66 points to 74,812.74 in early trade, while Nifty rose 85.55 points to 23,414.55.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,809.99 crore on a net basis on Tuesday (September 22, 2026), according to exchange data.

The rupee gained 24 paise to 95.72 against U.S. dollar in early trade on Monday (September 21, 2026), supported by a slight moderation in crude oil prices and a positive trend in domestic equities.

Forex traders said initial gains in domestic equities and improved foreign fund sentiment boosted investor sentiment, but sustained importer demand for greenbacks from oil companies and broader strength in the U.S. dollar Index weighed on the local unit.

At the interbank foreign exchange market, the rupee opened at 95.86 against the U.S. dollar, then gained some ground to touch 95.72 against the American currency, registering a gain of 24 paise from its previous close.

On Friday (September 18), the rupee closed lower by 7 paise at 95.96 against the U.S. dollar.

“The rupee closed at 95.89 on Friday (September 18) after being defended near 96 last week. We expect a broad range of 95.60–96.50, with the 96.40–96.50 zone acting as stiff resistance,” said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.31, higher by 0.09%. Brent crude, the global oil benchmark, was trading lower by 2.10% at $101.69 per barrel in futures trade.

“Brent had a highly volatile last week: it closed at $105.68 on Monday (September 14), jumped to $108.75 on Tuesday (September 15) after touching a weekly high of $109.45, before reversing sharply as concerns over Saudi supply disruptions began to ease,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

On the domestic equities market front, Sensex jumped 448.32 points to 74,743.28 in early trade; Nifty up 50.3 points to 23,396.70.

Foreign Institutional Investors (FIIs) bought equities worth ₹599.54 crore on a net basis on Friday (September 18), according to exchange data.

Meanwhile, India’s forex reserves dropped by $4.924 billion to $780.782 billion during the week ended September 11 due to a fall in foreign currency and gold reserves, according to the RBI data released on Friday (September 18).

The rupee rebounded from over two-month low levels, gaining 16 paise to 95.73 against the U.S. dollar in early trade on Friday (September 18, 2026), buoyed by a buying trend in domestic equity markets and easing crude oil prices overseas.

Forex analysts said the retreat of crude prices below the 104-per-barrel level from a steep rise earlier this week eased pressure on the Indian currency, even as U.S. bond yields fell from record highs after the U.S. Federal Reserve hiked interest rates by 25 basis point.

At the interbank foreign exchange market, the rupee opened at 95.75 and gained slightly to trade at 95.73 against the greenback in early deals, up 16 paise from its previous close.

The local unit ended 2 paise higher at 95.89 against the American currency on Thursday (September 17), after declining 150 paise, or nearly 1.5%, in the preceding eight sessions since the closing level of 94.43 against the greenback recorded on September 4.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02% lower at 99.97.

Brent crude, the global oil benchmark, was trading 0.93% lower at $103.85 per barrel in futures trade.

In domestic equities, Sensex rose 122.18 points, or 0.16%, to 74,436.77, while the Nifty gained 23.55 points, or 0.10%, to 23,294.15.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,208.76 crore on a net basis on Thursday (September 17), according to exchange data.

The story so far: The Reserve Bank of India (RBI) introduced a special swap facility in June to encourage non-resident Indians to put money into FCNR(B) deposits, as the rupee faced pressure from high oil prices and India sought to strengthen its foreign-exchange reserves.

The response was much stronger than the RBI’s initial target, as Indian banks mobilised more than $127 billion through these deposits, against an initial target of about $50 billion. The RBI subsequently closed the window for fresh FCNR(B) deposits on August 31, 2026.

The scheme has given banks a relatively cheap source of foreign-currency funding and added substantially to India’s foreign-exchange reserves. The deposits typically have three-to-five-year maturities, raising the question of who bears the currency risk when the principal and interest have to be paid.

What risk does the RBI take?

The RBI’s special swap facility shields banks from foreign-exchange risk on the principal amount of the FCNR(B) deposits. Reuters reported that the interest payments, however, have to be managed by the banks independently.

Under the arrangement, the RBI bears the cost of hedging the foreign-currency exposure, according to a BofA Securities Research report. It estimated that this hedging cost could be up to 3%, while SBI Research used an average hedging cost of around 3% a year in its calculations.

So, the RBI’s cost comes from protecting the dollar value of the principal against movements in the rupee-dollar exchange rate.

How does the RBI handle this cost?

The RBI has received foreign currency through the deposits, adding to the country’s reserves. SBI Research said the RBI had recouped $31.2 billion of its foreign-currency assets by August 7, 2026, equivalent to 55% of the amount mobilised at that point. It also said the RBI may use part of the amount to invest in U.S. securities because of higher yields.

BofA estimated that the RBI could earn around 4.5-5% on the foreign reserves generated through the deposits. It said this could potentially more than offset a hedging cost of up to 3%, assuming the foreign-currency holdings are hedged for five years.

SBI Research assumed FCNR(B) mobilisation of $65-70 billion and a 3% annual hedging cost, and calculated an annual notional cost of about $2.1 billion. If that cost remained at 3% for five years, the cumulative cost would be about $10.5 billion.

It argued that this cost is relatively small compared with India’s foreign-exchange reserves. Against current reserves of around $700 billion, it calculated the five-year cost at 1.45% of the reserve stock.

What risk do banks still take?

The RBI’s swap does not cover the interest that banks have to pay depositors in dollars.

That means banks have to arrange the dollars needed for these interest payments and manage the foreign-exchange exposure themselves. Reuters reported that foreign banks are largely hedging this exposure, while most state-run banks and several private-sector Indian lenders have left it unhedged.

Why are some banks leaving the interest exposure unhedged?

The main reason cited by bankers is the cost of hedging.

Reuters reported that hedging the foreign-exchange risk on interest payments for three-to-five-year deposits costs banks about 3% a year. The interest on these deposits is paid when the deposits mature.

Some banks have therefore chosen not to pay that cost and instead plan to buy dollars when they actually need to make the interest payments.

One banker at a mid-sized state-run lender told Reuters that the bank expected to handle the payments through spot dollar purchases when required, rather than locking in protection in advance.

What happens if the rupee weakens?

Consider a bank that has to pay $1 million in interest.

If the dollar costs ₹95, the payment would require ₹9.5 crore. If the rupee weakens and the dollar rises to ₹100 at the point of maturity, the same $1 million payment would require ₹10 crore.

A bank that has hedged its exposure would have protection against such a currency movement. A bank that has left the exposure unhedged would have to bear the higher rupee cost.

This could become a broader concern because much of the future interest-payment exposure has been left unhedged. If the rupee weakens significantly, banks could need to buy dollars at the same time to meet their interest obligations. That could increase demand for dollars and add to pressure on the rupee.

That means the FCNR(B) scheme has not eliminated currency exposure altogether. The RBI has taken on the exposure associated with the principal through its swap, while banks continue to face currency risk on the interest payments in the future.

The rupee appreciated 26 paise to 94.90 against U.S. dollar in early trade on Thursday (July 2, 2026), supported by easing crude oil prices.

Forex traders said the rupee opened on a positive note as crude oil prices have fallen back to levels seen before the West Asia conflict. Even global risk sentiment has stabilised compared to the panic witnessed a few weeks ago.

Foreign investors poured nearly $5.3 billion into Indian bond markets during June, marking the first month of positive inflows after three consecutive months of outflows, they said.

At the interbank foreign exchange market, the rupee opened at 94.95, then touched 94.90 against the US dollar, registering a gain of 26 paise from its previous close.

On Wednesday (July 1, 2026), the rupee depreciated 60 paise to close at 95.16 against the U.S. dollar.

“As fresh foreign capital starts entering India, markets believe the RBI may continue absorbing a significant portion of these inflows rather than allowing them to fully strengthen the rupee,” CR Forex Advisors MD Amit Pabari said.

Despite positive FII inflows and lower crude oil prices the rupee weakened sharply. If the rupee cannot strengthen on good news, any negative development could easily push USD-INR towards the 95.80–96.00 zone. “For now, the bias remains on the upside, while 94.80 is likely to act as an important support level,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.38, lower by 0.01%.

Meanwhile, Brent crude, the global oil benchmark, was trading lower by 1.13% at $70.76 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 377.40 points to 77,269.54 early trade, while the Nifty rallied 106.70 points to 24,113.25.

Foreign institutional investors sold equities worth ₹1,140.50 crore on a net basis on Wednesday, according to exchange data.

The rupee pared most of its initial gains and settled for the day higher by just 6 paise at 94.34 (provisional) against the U.S. dollar on Friday (June 19, 2026), as a firming dollar index and rising crude oil prices weighed on investor sentiments.

Forex traders said the rupee opened on a positive note, on optimism that trade negotiations between India and the U.S. are set to gain momentum.

Indian Foreign Secretary Vikram Misri on Thursday (June 18, 2026) said trade was a major subject of discussion between Prime Minister Narendra Modi and U.S. President Donald Trump, with both leaders directing their negotiators to finalise the proposed trade pact at the earliest.

However, market sentiments weakened amid uncertainty over the U.S.-Iran peace deal, traders said.

U.S. Vice-President J.D. Vance has put off his visit to Switzerland for talks with Iranian negotiators, with the White House citing logistical issues.

At the interbank foreign exchange, the rupee opened at 94.30 against the U.S. dollar and traded in the range of 94.20-94.52. Eventually, it settled at 94.34 (provisional), up 6 paise from its previous close.

On Thursday (June 18, 2026), the rupee settled 10 paise higher at 94.40 against the U.S. dollar.

“The rupee remains the lead performer among Asian peers, energised by a resurgence of capital inflows and cooling oil prices. With risk-on sentiment back in the driver’s seat, we expect the local rupee to march towards 94 on the back of dollar inflows. Technically, USD-INR spot is boxed between a crucial resistance at 94.90 and firm support at 94.10,” said Dilip Parmar, Research Analyst, HDFC Securities.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.76, lower by 0.08%.

Brent crude, the global oil benchmark, was trading down 0.65% at $79.33 per barrel in futures trade.

On the domestic equity market front, Sensex dived 607.08 points to settle at 76,802.90, while the Nifty fell 154.90 points to 24,013.10.

Foreign institutional investors offloaded equities worth ₹1,025.20 crore on a net basis on Thursday (June 18, 2026), according to exchange data.

Mr. Misri’s comments came a day after Mr. Modi and Mr. Trump held wide-ranging talks for the first time in 16 months on the margins of the G7 Summit in an attempt to rebuild strained bilateral ties.

Mr. Misri said significant progress has been made on the conclusion of the interim trade pact and that U.S. Trade Representative Jamieson Greer will be visiting India next week to take forward the discussions.

Union Finance Minister Nirmala Sitharaman on Sunday (June 14, 2026) said fluctuations in the rupee against the U.S. dollar are influenced by a range of global and domestic factors.

Speaking to reporters at Devanahalli near Bengaluru during a programme marking 12 years of Prime Minister Narendra Modi-led NDA government, Ms. Sitharaman said that the global and domestic factors are such as geopolitical uncertainties, foreign capital movements, and India’s dependence on imports such as crude oil, fertilizer, and gold. “The Reserve Bank of India intervenes in the foreign exchange market only to curb excessive volatility and not to maintain a fixed exchange rate,” she said.

She explained that the central bank acts sparingly whenever there are sharp fluctuations in the currency market.

The Finance Minister noted that several international developments have a bearing on the rupee’s movement. These include policy decisions by the U.S. Federal Reserve, movements in major global currencies, and foreign investment inflows and outflows.

“The rupee’s movement against the U.S. dollar is shaped by several factors, including global economic uncertainties, U.S. Federal Reserve policy decisions, fluctuations in major international currencies, and foreign capital inflows and outflows,” Ms. Sitharaman said.

Finance Minister targets Rahul Gandhi

Meanwhile, Ms. Sitharaman launched a sharp attack on Leader of the Opposition in the Lok Sabha Rahul Gandhi, accusing him of consistently undermining India’s achievements while criticising Mr. Modi and the Union government.

Addressing party workers at the Viksit Bharat Sankalp Samavesha in the city, Ms. Sitharaman alleged that Mr. Gandhi routinely criticised government initiatives and downplayed the achievements of Indian people in an attempt to target Mr. Modi and the Centre.

“Whenever the Leader of the Opposition speaks in the Lok Sabha, he only criticises developments and downplays the achievements of the people of India, thinking that he is attacking the Prime Minister or the Central government,” she added.

Refuting claims that India faces an impending crisis, Ms. Sitharaman said the country’s economic fundamentals remain strong.