Rupee gains on exporter dollar sales, foreign inflows; best in Asia Tuesday

The rupee strengthened to 89.88 per dollar on exporter dollar sales and foreign inflows, leading Asian peers on Tuesday, though analysts said structural demand-supply pressures persist

The rupee strengthened against the greenback on Tuesday due to dollar sales by exporters coupled with foreign inflows, said dealers. The local currency settled at 89.88 per dollar, against the previous close of 90.07 per dollar.

 

However, market participants said that even with the temporary relief, the rupee’s pressures remain, as the market still faces a structural gap where dollar demand consistently outweighs supply.

 

The rupee was the best-performing currency among its Asian peers with 0.2 per cent appreciation against the greenback. Indonesian rupiah was the second-best performing currency with 0.1 per cent appreciation.

 

“The Indian rupee has demonstrated a significant rebound, successfully dismissing a two-day decline to emerge as the top-performing currency among its Asian peers. The appreciation was driven by the unwinding of dollar long positions. Further supporting the rupee was a favourable backdrop of lower global crude oil prices and stronger regional currencies,” said Dilip Parmar, senior research analyst, HDFC Securities. 

 

“However, despite this much-needed reprieve, the rupee is not yet out of the woods, as the fundamental imbalance persists with the demand for the dollar continuing to outstrip its available supply. Technically, the spot USD INR (trading) faces a crucial resistance level at 90.30 while finding a strong support base at 89.70,” Parmar added.

 

The rupee has depreciated by 4.91 per cent in 2025-26 (FY26) so far, whereas it has depreciated by 4.75 per cent during calendar 2025.

 

Traders now eye the US Federal Reserve meeting outcome later this week.

 

“With flows from anchor investors of ICICI Prudential and QIP (qualified institutional placement) of Swiggy, the rupee today made an intraday high of 89.8375 before closing near to 90 levels, thus gaining slightly from yesterday's close. With trade deal talks close-by, as also the FED meeting, the Reserve Bank of India (RBI) may not be allowing the fall in rupee and could be protecting 90.30 for now,” said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.