- Indian Rupee struggles to gain despite RBI’s intervention limiting the losses.
- India's economy is estimated to grow 6.5% in this fiscal year.
- Investors will monitor the preliminary US Consumer Sentiment data for November.
Indian Rupee (INR) trades flat on Friday despite the potential intervention from the Reserve Bank of India (RBI) limiting the depreciation in the local currency. In an interview with Nikkei Asia on Thursday, RBI Governor Shaktikanta Das said that geopolitical tensions across the globe have generated economic fragmentation that applies brakes and barriers to growth and supply chains, but he’s confident that India can rise amid the uncertainty.
India's economy is expected to grow 6.5% this fiscal year, the fastest-growing major economy in the world. The Indian Rupee’s upside seems limited as higher oil prices and the higher US Treasury bond yields remain in focus. Looking ahead, market players will monitor the preliminary US Consumer Sentiment for November, which is expected to grow to 63.7.
Daily Digest Market Movers: Indian Rupee trade unchanged amid the current uncertain environment
- The Reserve Bank of India (RBI) Governor Shaktikanta Das expressed optimism about India's economic prospects but warned that the route to becoming a prosperous society may not be smooth.
- RBI’s Monetary Policy Committee (MPC) in its October meeting, estimated Consumer Price Index (CPI) at 5.4% for 2023-24, a decline from 6.7% in 2022-23.
- RBI Governor Das said India remains vulnerable to recurring and overlapping food price shocks and the monetary policy remains focused on keeping inflation at the 4% target.
- RBI forecasts India's Gross Domestic Product (GDP) will grow at 6.3% in the current fiscal year.
- The US weekly Initial Jobless Claims rose by 217K versus 220K prior, below the expectation of 218K.
- The Continuing Claims climbed to 1.834M from 1.812M in the previous week, the highest level since mid-April.
- Fed Chair Jerome Powell said they are not confident that they have achieved a sufficiently restrictive policy to bring inflation down to 2% over time.
- Fed Chair Powell further added that the Fed will not hesitate if it’s appropriate to tighten policy further.
Technical Analysis: The Indian Rupee stays range-bound, the upside seems limited
The Indian Rupee trades flat on the day. The USD/INR pair trades in a familiar range of 83.00–83.35 since September. According to the daily chart the USD/INR bullish potential remains intact as the pair holds above the key 100- and 200-day Exponential Moving Averages (EMA).
The upper boundary of the trading range at 83.35 acts as a key resistance level for USDINR. A decisive break above 83.35 will pave the way to the year-to-date (YTD) highs of 83.45. The additional upside filter to watch is a psychological round figure at 84.00.
On the downside, a critical contention level will emerge at 83.00, representing the confluence of a low from October 24 and a round mark. Any follow-through selling below 83.00 will see losses extend to a low of September 12 at 82.82, followed by a low of August 4 at 82.65.
US Dollar price in the last 7 days
The table below shows the percentage change of US Dollar (USD) against listed major currencies in the last 7 days. US Dollar was the weakest against the Euro.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.50% | -0.30% | 0.38% | 1.05% | 0.58% | -0.01% | -0.31% | |
| EUR | 0.49% | 0.21% | 0.87% | 1.53% | 1.07% | 0.49% | 0.21% | |
| GBP | 0.30% | -0.21% | 0.66% | 1.33% | 0.87% | 0.29% | 0.02% | |
| CAD | -0.38% | -0.87% | -0.71% | 0.68% | 0.21% | -0.38% | -0.66% | |
| AUD | -1.05% | -1.56% | -1.35% | -0.67% | -0.47% | -1.05% | -1.35% | |
| JPY | -0.59% | -1.11% | -0.90% | -0.21% | 0.47% | -0.59% | -0.93% | |
| NZD | -0.01% | -0.54% | -0.31% | 0.36% | 1.04% | 0.57% | -0.33% | |
| CHF | 0.28% | -0.21% | 0.00% | 0.66% | 1.33% | 0.86% | 0.29% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Indian Rupee FAQs
What are the key factors driving the Indian Rupee?
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
How do the decisions of the Reserve Bank of India impact the Indian Rupee?
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
What macroeconomic factors influence the value of the Indian Rupee?
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
How does inflation impact the Indian Rupee?
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.