Indian Rupee Opens Flat Amid Dollar Strength and Treasury Yield Pressures

The Indian rupee started the day unchanged against the US dollar on October 6, holding steady at 96.31 per dollar. This follows a close of 96.30 on the previous trading day. The rupee’s stability comes despite rising US Treasury yields and a stronger dollar driven by the euro. Finrex projects the rupee will open at 96.33 per dollar today, citing persistent selling by foreign portfolio investors (FPIs) and steady dollar demand.

The Reserve Bank of India (RBI) has been intervening to prevent further depreciation beyond 96.33. However, demand for dollars from FPIs and oil companies remains high, even as crude oil prices dropped to $100.63 per barrel and the Dollar Index fell to 102.12. The US 10-year Treasury yield remains elevated at 5.32%, putting pressure on emerging-market currencies, including the rupee.

Exporters are advised to cover their near-term export obligations for October and part of November, while importers face challenges in finding favorable dips to buy dollars. Meanwhile, Asian currencies showed mixed performance against the US dollar. The Indonesian Rupiah and South Korean Won declined, while the Taiwan Dollar and Japanese Yen saw gains.