- USD/INR is trading near the 90.20–90.25 zone as RBI intervention expectations rise
- The rupee remains under pressure from higher crude prices and foreign investor outflows
- Recent declines in India’s forex reserves have intensified speculation of central bank action
- The technical structure keeps USD/INR supported while below-term momentum cools
USD/INR is holding near the 90.20–90.25 area in early Monday trade as the Indian rupee remains under pressure and RBI intervention becomes a central theme for currency markets. The rupee opened weaker at the start of the week, extending losses from last Friday, as rising crude oil prices and persistent foreign portfolio outflows continued to weigh on sentiment. Traders are increasingly alert to potential Reserve Bank of India action around the 90.00 handle, a level widely viewed as psychologically important.
The rupee’s decline comes after a sharp sell-off late last week, with market participants pointing to external pressures rather than domestic fundamentals as the primary driver. As reported by Reuters, the Indian currency has struggled amid global risk uncertainty and sustained demand for the US dollar, keeping USD/INR elevated despite periodic attempts to stabilise.
Rupee Weakens on Crude Prices and Foreign Outflows
The Indian rupee began the week on the back foot, slipping further after losing ground in the previous session. Higher global crude prices have added pressure by widening India’s import bill, while continued selling by foreign institutional investors has drained demand for local assets.
Equity markets reflected the cautious mood, with benchmark indices opening lower as global risk sentiment softened. Currency traders noted that concerns around geopolitical developments and potential trade frictions have also reduced appetite for emerging market exposure, leaving the rupee vulnerable during periods of thin liquidity.
Foreign investors were net sellers in the final session of last week, reinforcing the downward pressure on the currency and keeping USD/INR pinned near recent highs.
Why RBI Intervention Matters at the 90 Level
Falling Reserves Fuel Speculation
Attention has now turned firmly to RBI intervention, particularly after the latest data showed a notable drop in India’s foreign exchange reserves. The decline has been interpreted by markets as a possible sign that the central bank has been active in the currency market, selling dollars to smooth volatility and slow the rupee’s slide.
Historically, the Reserve Bank of India has stepped in near key levels to curb disorderly moves rather than defend a fixed exchange rate. With USD/INR hovering near 90, traders believe the RBI may look to prevent a sharp or accelerated break higher, even if it allows gradual depreciation.
Market Impact of Central Bank Action
RBI intervention can temporarily cap USD/INR upside by discouraging speculative positioning and improving short-term liquidity conditions. However, sustained intervention comes at the cost of reserve depletion, meaning the central bank is likely to act selectively rather than aggressively unless volatility intensifies.
As a result, markets are watching price behaviour closely for signs of official presence, particularly during low-liquidity periods.
USD/INR Technical Outlook: Uptrend Holds but Momentum Slows
From a technical standpoint, USD/INR remains in a broader uptrend on the daily chart. The pair continues to trade above key medium-term support levels, reflecting underlying demand for the dollar.
Immediate support is located near 89.80, an area that has previously attracted buyers. A daily close below this level could signal short-term consolidation and open the door toward 89.50.
On the upside, resistance sits around 90.30, followed by the recent highs near 91.00. Momentum indicators show signs of cooling, with the MACD flattening after a recent push higher, suggesting that upside progress may slow unless fresh catalysts emerge.
Overall, the technical bias remains constructive while USD/INR holds above support, though the presence of potential RBI intervention could limit near-term upside extensions.
USD/INR Outlook: Volatility Likely Around RBI Signals
The near-term outlook for USD/INR remains sensitive to RBI intervention signals, foreign capital flows, and movements in global crude prices. While the broader trend continues to favour a firm dollar, the central bank’s actions are likely to shape the pace and smoothness of any further gains.
Markets are also awaiting upcoming macroeconomic data for clearer directional cues, with traders balancing dollar strength against the risk of official pushback near current levels.
Writer’s Trade Idea: My preferred strategy is to buy USD/INR on dips toward 89.80, targeting a move back toward 90.80, while placing a stop-loss below 89.40.
RBI intervention is crucial near the 90.00 level as it can limit excessive volatility and discourage speculative moves against the rupee during periods of external pressure.
The rupee is under pressure from higher crude oil prices, sustained foreign investor outflows, and global risk uncertainty that supports the US dollar.
Key support is seen near 89.80, while resistance lies around 90.30 and the recent highs near 91.00.