A man holds Indian currency notes inside a shop in New Delhi, India, April 3, 2025. REUTERS
MUMBAI, Dec 30 (Reuters) – The Indian rupee held in a tight band on Tuesday, mirroring the subdued tone that usually sets in when year-end trading thins and corporate hedging slows.
The rupee opened slightly firmer at 89.9325 and moved in a roughly three-paisa range around that level. It was last at 89.9350 at 12:25 p.m. IST, after settling at 89.9750 on Monday.
“We have seen some decent-sized moves in recent days. From around 91 to the 89.20–89.30 area and then back toward 90,” a currency trader said.
“Around 90, it’s difficult to say where the balance of risks lies, the bias feels neutral. That should change once participation and volumes pick up in the New Year.”
He added that corporate participation was largely limited to managing immediate payables or receivables, with hedging activity remaining low.
The central bank’s expected presence at near the 90 level has helped anchor the rupee, traders said, while reinforcing the sideways tone seen since the open.
Meanwhile, dollar/rupee forward premiums resumed their slide, with the one-year implied interest rate falling about 10 basis points to 2.71%. The one-year premium is now down around 60 basis points from last week’s peak.
The pullback follows the central bank’s announcement of a $10 billion buy/sell dollar-rupee swap, offers by state-run banks, and a decline in rollover costs from Dec. 31 to Jan. 1, per traders.
Reporting by Nimesh Vora; Editing by Ronojoy Mazumdar
