A roadside currency exchange vendor counts notes in New Delhi, India, February 10, 2025. REUTERS
MUMBAI, Jan 16 (Reuters) – The Indian rupee slipped on Friday, putting it on course for a weekly decline as strong dollar demand spurred by maturing positions in the non-deliverable forwards (NDF) market and on account of corporate hedging singed the currency.
The rupee was at 90.5725 per dollar as of 10:50 a.m. IST, down nearly 0.2% from its close in the previous session.
Traders pointed to heightened demand for dollars at the central bank’s daily reference rate, also called the fix, which weighed on the rupee.
The reference rate is the daily benchmark used to settle contracts and often attracts concentrated dollar buying or selling around the fix. The fix was last quoted around 0.50/0.60 paisa premium, trader said, signalling heightened dollar demand.
Early in the day there was a slight arbitrage between the onshore forwards and NDF market, which hurt the rupee as well, a trader at a Mumbai-based bank said.
“USD/INR is likely to face strong resistance in the 90.30–90.50 zone. A sustained break above this area could open the path toward 91.20–91.50. On the downside, 89.50 remains a key support,” said Amit Pabari, managing director at FX advisory firm CR Forex.
On Friday, the rupee also had to contend with a broadly firmer dollar, buoyed by upbeat U.S. economic data that affirmed market positioning around the U.S. Federal Reserve standing pat on interest rates later this month.
Asian currencies were trading mixed with the Korean won bogged down 0.3% while the Thai baht rose 0.2%.
Benchmark Indian equity indexes, BSE Sensex and Nifty 50 each rose nearly 1%, supported by gains in IT majors. MSCI’s gauge of Asian shares outside of Japan was up 0.7% as well.
Reporting by Jaspreet Kalra; Editing by Sonia Cheema
