Rupee Holds Steady as Dollar Demand Limits Movement

The Indian rupee opened Tuesday on a steady note, moving only slightly as persistent dollar demand from importers and mixed portfolio flows kept the currency locked in a narrow range. The rupee traded at 88.65 against the U.S. dollar at 9:50 a.m. IST, slipping just a touch from Monday’s close of 88.63.

For nearly two weeks, the currency has hovered tightly between 88.50 and 88.80, a sign of firm two-way market activity. Traders said the Reserve Bank of India’s regular dollar-selling interventions have continued to prevent sharp depreciation, even as demand for the greenback stays elevated.

Domestic equity markets also reflected cautious sentiment. The Sensex and Nifty 50 slipped about 0.3% each in early trading but still held up better than broader Asian indices, where shares outside Japan dropped around 2% amid weak global risk appetite.

Foreign investors remained net sellers, withdrawing $1.2 billion from Indian equities so far in November. With this, total outflows in 2025 have reached $17.2 billion. Market participants noted that a sizeable equity block deal on Tuesday added pressure on the rupee, although some foreign banks were seen offering dollars, helping balance the flow.

Adding to the backdrop, data earlier this week showed India’s merchandise trade deficit widening to a record $41.68 billion in October, driven by a surge in gold imports and a dip in exports to the U.S. The development has kept currency traders alert, especially with global cues remaining uncertain.

The broader currency market also stayed range-bound, with the dollar index steady near 99.5. Most Asian currencies weakened between 0.1% and 0.6% ahead of key U.S. economic releases this week, including the closely watched September nonfarm payrolls report due on Thursday.

Despite the churn around global markets and domestic flows, traders said the rupee is expected to stay within its familiar band, with limited room for sharp moves as long as the RBI keeps a presence on the upper end of the range.