Indian rupee moved in a narrow range and ended nearly unchanged at 90.94 against the US dollar on Wednesday, as early gains supported by a weaker greenback faded due to importer demand and caution in the market.
The local currency opened slightly higher in early trade, tracking a soft dollar and lower global crude oil prices. A fall in oil, a major component of India’s import bill, typically supports the rupee by reducing demand for the US currency. However, dollar buying by importers, especially oil companies, erased most of the initial gains and kept the unit confined to a tight band.
Forex dealers said market participants are also factoring in the global uncertainty linked to the US tariff environment, which has been influencing currency movements worldwide. Concerns over trade measures and their impact on capital flows have kept traders from taking aggressive positions in emerging market currencies, including the rupee.
Another key factor limiting sharp movement is the expectation of Reserve Bank of India (RBI) intervention. The central bank has been actively managing volatility in the foreign exchange market, and its presence near crucial levels has prevented the rupee from strengthening or weakening sharply. This has led to a phase of consolidation over the past few sessions.
Foreign fund inflows and positive cues from other Asian currencies offered some support to the rupee, but mixed trends in domestic equities restricted further upside. Analysts said the currency is currently driven by balanced demand and supply for the dollar, resulting in range-bound trading.
Going ahead, the rupee’s direction will depend on the movement of the US dollar, crude oil prices, global trade developments, particularly tariff-related news, and the trend in foreign portfolio investments.
For now, the currency continues to hover near the 91 mark, reflecting a cautious market as traders await fresh global and domestic triggers while keeping a close watch on the RBI’s actions.
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