Rupee advances as focus shifts to MPC meet; opens higher at 88.66/$

Indian rupee today: The domestic currency opened 5 paise stronger at 88.66 on Monday against the greenback

The Indian Rupee traded higher on Monday as traders turned their focus to the Reserve Bank of India’s (RBI’s) six-member Monetary Policy Committee (MPC) meeting. 

 

The domestic currency opened 5 paise stronger at 88.66 on Monday against the greenback, according to Bloomberg. The currency fell 3.6 per cent so far this year, while it hit an all-time low of 88.79 last week. 

 

The Indian rupee is set to open at 88.65 levels as the dollar index was slightly down, while Asian currencies were slightly up from Friday's closing, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

   

The rupee has come under pressure due to reduced RBI intervention, global dollar strength, and steep visa fee hikes, Bhansali noted. Continued capital outflows and geopolitical developments are expected to keep the currency under pressure, he said. The upcoming RBI policy meeting on 1 October is likely to influence both the rupee and government bond movements. 

 

The MPC is expected to maintain the status quo at its October meeting, scheduled for September 29-October 1, according to a Business Standard poll. The domestic rate-setting panel kept the repo rate unchanged in August, following a 50-basis-point (bp) cut in June. Earlier, the panel had reduced the rate by 25 bps each in February and April after holding it steady for 11 consecutive meetings.  

 

The RBI may intervene to keep the rupee around the 88.80 level, as market watchers monitor the impact of US tariffs and external capital flows, according to Bhansali. "Importers are likely to buy on dips, while exporters may sell on upticks to manage cash inflows."

 

Meanwhile, the Dollar index fell after posting two consecutive weeks of gains, with investors' focus now on the non-farm payrolls data later this week. The measure of the greenback against a basket of six major currencies was down 0.22 per cent at 97.93.

 

In commodities, crude oil prices fell nearly 1 per cent amid reports that Opec+ considered a larger November supply hike. Brent crude price was down 0.58 per cent at 69.72 per barrel, while WTI crude prices were lower by 0.72 per cent at 65.25 per barrel, as of 9:22 AM IST.