Rupee gains ahead of RBI rate decision; opens higher at 87.73/$

Indian Rupee today: The domestic currency opened 7 paise higher at 87.73 against the dollar on Wednesday, according to Bloomberg

Indian rupee eased from a record closing low on Wednesday as investors gear up for the Reserve Bank of India's (RBI) policy decision amid rising trade uncertainties. 

 

The domestic currency opened 7 paise higher at 87.73 against the dollar on Wednesday, according to Bloomberg. The rupee has declined 2.6 per cent so far in the calendar year and recorded its worst monthly fall in July since September 2023. 

 

The Reserve Bank of India's Monetary Policy Committee (MPC) is widely expected to keep policy rates unchanged. The RBI is likely to remain status quo as per a Business Standard poll, with all analysts expecting a further reduction in the 2025-26 (FY26) inflation forecast. However, Sanjay Malhotra’s commentary regarding the trade tensions with the US will be keenly watched.  RBI MPC Meeting LIVE updates: Repo rate likely to stay unchanged in Aug under Guv Sanjay Malhotra 

US President Donald Trump ramped up trade tensions with India with his decision to raise tariffs on India "substantially in the next 24 hours" over its continued imports of Russian oil.    He also said that tariffs on semiconductors and pharmaceutical imports will be announced within the next week. Pharmaceutical products will see their tariff rate jump as high as 250 per cent within 12 to 18 months, Trump told CNBC. The dollar index, the measure of the greenback against a basket of six major currencies, was down 0.06 per cent at 98.72. 

 

The Indian rupee, which closed at a low of 87.80, was well supported by the Reserve Bank of India (RBI) and was expected to open flat today, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.

 

Markets are closely watching how long the RBI will continue to defend the currency, as US President Donald Trump pushes for additional tariffs on India due to the lack of resolution over its Russian oil purchases, Bhansali said. "Until then, the rupee may remain range-bound, with the RBI defending the 88 level, while foreign portfolio investors (FPIs) and oil companies continue buying dollars."   

FPIs have been net sellers of domestic equities for the eleventh straight session on Tuesday, totalling nearly ₹35,000 crore, according to provisional data from NSE. 

 

In commodities, crude oil prices fell to a one-month low with the Russian crude buyer sanctions in focus. Brent crude price was up 0.59 per cent at 68.04 per barrel, while WTI crude prices were higher by 0.58 per cent at 65.54, as of 9:25 AM IST. 

  RBI MPC Meeting LIVE updates: Repo rate likely to stay unchanged in Aug under Guv Sanjay Malhotra