Market caution is shaping the opening tone for the Indian rupee, which is set to remain under strain as global and domestic risk aversion builds. Traders remain hesitant to push the currency past the 92-per-dollar level due to fears of central bank action.
The 1-month non-deliverable forward suggested the rupee would open between 91.94 and 91.99 against the U.S. dollar. This follows a close near its record low of 91.9825 on Friday.
Indian equities, which traded on Sunday for the budget session, recorded their sharpest budget-day fall in 6 years. The drop reflected rising local risk aversion. At the same time, sharp moves in precious metals triggered a wider risk-off shift, dragging down Asian stocks and U.S. equity futures ahead of a heavy week of corporate earnings, central bank meetings, and key economic data.
In such conditions, the rupee would normally have weakened beyond 92. A currency trader at a bank said, “The only thing holding it back is RBI defence and the market’s reluctance to test that discomfort zone. We could still see 92, depending on the pre-open price action.”
Last week, the rupee failed to move past the 92 mark, as state-run banks repeatedly sold dollars near that level. Traders viewed this pattern as a sign of intervention linked to the central bank.
The Reserve Bank of India is expected to continue supporting the currency, but the overall weakening trend may continue, according to a senior treasury official at a bank. The official said the budget is unlikely to halt recent equity outflows and that Indian bonds could also face pressure when markets open on Monday.
Foreign investors have sold a record $22.9 billion worth of Indian equities since 2025, adding to the strain on the rupee.
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