Indian Rupee Ends Flat at 90.95 Amid NDF-Linked Dollar Demand and RBI Watch

The Indian rupee closed nearly unchanged on Wednesday as dollar demand linked to maturing non-deliverable forward (NDF) contracts offset support from modest capital inflows and gains in Asian currencies. The local unit settled at 90.9475 per dollar, marginally different from the previous session’s close of 90.95.

Currency traders said elevated greenback demand tied to offshore derivatives weighed on the rupee, even as expectations of Reserve Bank of India (RBI) intervention kept speculative bets in check.

NDF Maturities Cap Gains

Market participants had anticipated increased dollar demand this week due to NDF maturities. Such offshore contracts often trigger spot market flows, putting temporary pressure on emerging market currencies like the rupee.

Despite this, appetite to aggressively short the rupee remained muted. Traders cited expectations that the RBI would step in to curb sharp depreciation if needed, limiting downside risks.

State-run banks were intermittently seen selling dollars above the 90.95 level, according to a trader at a large private lender, suggesting possible intervention-linked flows.

Asian Currencies and Global Cues

Broader Asian currencies rose between 0.2% and 0.5%, with the Chinese yuan touching a 34-month high. The dollar index was largely flat at 97.8, offering limited directional cues.

Indian equity benchmarks initially surged nearly 1% before trimming gains. The Nifty 50 ended 0.2% higher, reflecting cautious optimism among investors.

Global markets are also watching the quarterly earnings of AI chipmaker Nvidia, whose results could influence global risk appetite given its heavy weighting in U.S. indices.

Conclusion

The rupee’s flat close underscores a tug-of-war between offshore dollar demand and domestic stabilising forces. With NDF-related flows and global cues in play, traders are likely to watch RBI signals and key technical levels closely in the sessions ahead.

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