A man counts money after withdrawing it from an automated teller machine (ATM) in New Delhi, India, April 3, 2025. REUTERS
MUMBAI, Jan 5 (Reuters) – The Indian rupee inched lower on Monday, pressured demand for dollars at the Reserve Bank of India’s reference rate and weakness in Asian currencies, while forward premiums rose.
The rupee quoted at 90.2425 at 11:12 am IST, having settled at 90.1975 on Friday. The currency is headed for its ninth daily decline in ten sessions, falling from 89.25 to near the current levels.
The rupee’s retreat reflects underlying dollar demand following the RBI intervention that triggered a recovery.
Routine corporate dollar demand and buying at the RBI reference rate have piled pressure on the currency in recent days, traders say. Exporters showing little urgency to add dollar supply kept the market skewed.
The reference rate is the daily benchmark used to settle contracts and often attracts concentrated dollar buying or selling around the fix.
The demand to buy dollars at the reference rate has been “heavy” on most days and remained that way on Monday, with the fix quoting at a premium, according to an FX salesperson at a mid-sized private sector bank.
A U.S.–India trade deal remains a key missing piece for the rupee to stage a sustained, meaningful rally, he said. Sentiment has soured further on that front after U.S. President Donald Trump warned of higher tariffs on India over Russian oil purchases.
Asian currencies were mostly weaker against the U.S. dollar on Monday, with the Malaysian ringgit and Philippine peso leading the decline.
Meanwhile, dollar/rupee forward premiums moved higher after bottoming out on Friday. A FX swap trader said the prior fall to 2.43% had been overdone, making current levels attractive for paying.
Reporting by Nimesh Vora; Editing by Janane Venkatraman
