The Indian rupee slipped to a
three-week low on Monday as a broadly upbeat dollar pinched
Asian currencies, with maturing contracts in the non-deliverable
forward also adding to the pressure on the local unit.
The rupee closed at 95.3950 per dollar, down 0.2 per cent
on the day. It had touched an intraday low of 95.4750, its
weakest level since June 12.
State-run banks were spotted offering dollars
intermittently, traders said, signalling the central bank’s
intention to avoid a sharp slide in the currency.
A firmer dollar and sustained merchant dollar demand have
weighed on the rupee even as the slump in oil prices and
regulatory measures to draw dollar inflows have offered comfort.
A revival of arbitrage trades between the onshore foreign
exchange market and non-deliverable forwards undertaken by
corporates has also weighed on the rupee in recent days.
Traders reckon that a gradual depreciation bias for the
rupee may resurface if the currency dips and holds below the 96
mark.
Analysts at Goldman Sachs have revised their rupee forecasts
stronger and now expect the USD/INR pair at 94, 95, and 96 in
three, six, and 12 months, compared to the 96, 96, and 97
levels previously.
The firm recommends staying short on THB/INR as a
relative-value carry trade, and favours a long wager on 30-year
bonds supported by the expansion of the Fully Accessible Route
bond universe, inflows and structural demand from local pension
and insurance companies.
Fully accessible route allows unfettered foreign investments
into Indian bonds, and these notes are part of global bond
indexes.
Foreign investors have favoured the benchmark 2036 bond over
the past two weeks, buying around 76 billion rupees ($796.12
million).
Elsewhere in global markets, stocks ticked higher as the
potential for increased energy supplies pulled down oil prices
and promised relief from inflationary pressures, while investors
awaited a crucial earnings season for the AI sector.
Published on July 6, 2026
