New Delhi [India], November 11 (ANI): Movement in the dollar and progress in US-India trade negotiations are likely to influence the Indian rupee’s direction in the coming days, according to a report by Bank of Baroda.
The report noted that the rupee remained steady through October and early November, supported by a mix of Reserve Bank of India (RBI) intervention, stronger dollar trends, sluggish foreign inflows, and higher importer demand for the greenback.
“RBI’s intervention in the forex market was prevalent to prevent the domestic currency from sliding to a record low,” the report said, adding that this reflects a shift from the central bank’s earlier stance of allowing a freer movement in the currency. “This trend is likely to persist in the coming days as well,” it added.
The rupee traded within a narrow range of Rs 87.83 to Rs 88.70 per dollar over the past month, with volatility easing sharply from over 4 percent in October to about 1.2 percent in November.
The report estimated that the rupee would likely trade in a range of Rs 88.5 to Rs 89.0 per dollar through the rest of November, though it cautioned that the outlook depends heavily on external developments, particularly in the United States.
Globally, the US dollar has strengthened, with the dollar index (DXY) rising 0.6 percent over the last month. This comes as markets scale back expectations of further Federal Reserve rate cuts this year, amid limited economic data due to the recent US government shutdown. The Japanese yen weakened 1.9 percent, while the British pound fell over 1 percent on fiscal concerns and anticipated tax increases.
The Bank of Baroda report further highlighted that foreign portfolio investor (FPI) flows remain subdued amid uncertainty over potential US tariff changes and their implications for India’s exports. “Any positive development on the trade front is likely to lift investor sentiment,” it added.
With global monetary policy shifts, renewed US data flow, and evolving trade negotiations, the rupee’s near-term trajectory will depend largely on external cues rather than domestic fundamentals, the report concluded. (ANI)
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