The Indian rupee slipped on Monday, ending a six-session rally after touching its strongest level in six months. The currency reached 93.69 to the US dollar before closing at 93.9275, slightly weaker than Friday’s close of 93.9050. Dollar buying by state-run banks reversed the early gains in thin trading ahead of Tuesday’s Diwali Balipratipada holiday.
Dollar demand reverses early gains
The rupee had gained 1.1% last week, helped by lower crude oil prices and renewed foreign investment in Indian equities. The decline in crude prices eased pressure on the currency because India relies heavily on imported oil. When oil becomes cheaper, importers generally need fewer dollars to pay for the same volume of crude.
Some traders said Monday’s dollar purchases by state-run banks may have been made on behalf of the Reserve Bank of India. The purpose of the purchases was unconfirmed. The rupee’s move from a six-month high to a slightly weaker close came as fewer market participants were trading before the holiday.
Central bank’s dollar commitments in focus
The RBI’s net short dollar position in the forward market reached nearly $240 billion in September, according to Reuters. That position represents future commitments to deliver dollars under contracts agreed earlier. Madhavi Arora, an economist at Emkay Global, said the central bank could use a sustained recovery in foreign inflows to rebuild its foreign exchange buffers, limiting how quickly the rupee strengthens.
US inflation is the next test
India’s domestic foreign exchange market was closed on Tuesday. Investors were awaiting the US consumer price report, which could shift expectations for the Federal Reserve’s December interest rate decision. A stronger-than-expected reading could support the dollar by increasing expectations of a US rate rise. For the rupee, the other factors to watch when local trading resumes are whether oil prices stay lower and whether foreign investors continue buying Indian shares.
Newshub Editorial in Asia – 10 November 2026
The Indian rupee slipped on Monday, ending a six-session rally after touching its strongest level in six months. The currency reached 93.69 to the US dollar before closing at 93.9275, slightly weaker than Friday’s close of 93.9050. Dollar buying by state-run banks reversed the early gains in thin trading ahead of Tuesday’s Diwali Balipratipada holiday.
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