The Indian rupee is expected to face additional challenges on Thursday following hawkish signals from several Federal Reserve officials, which bolstered the dollar and U.S. bond yields. This development compounds the pressure on the rupee from a continuous rise in oil prices.
Traders anticipate the rupee will open within the 94.90-94.95 range after closing at 94.8450 on Wednesday. The currency is positioned to record its third consecutive weekly decline, having nearly erased all gains from earlier in the month due to rare interventions by the central bank aimed at curbing excessive speculation.
In its recent policy meeting, the Federal Reserve maintained unchanged interest rates, marking its most divided decision since 1992, with three officials dissenting against guidance that still favored easing. “Pending price pressures are clearly seeping into more cautious views, but the bar to hike rates is still high,” noted Tai Hui, Chief Market Strategist for APAC at J.P. Morgan Asset Management. He remarked that, given the committee’s sentiment that the current policy is neutral, there is room for patience as the ongoing conflicts and their economic impacts unfold.
Oil prices continued to rise on Wednesday and extended their increases into Thursday’s Asian trading session. Brent crude futures were last reported at almost $121 per barrel, positioning them for a weekly increase of approximately 14%.
The surge in oil prices, coupled with a slowdown in capital inflows, is creating a persistent outlook of rupee weakness, according to a trader at a foreign bank. Offshore markets indicate positioning for further depreciation, while onshore activities are being primarily influenced by actual dollar demand. This demand has been heightened following the central bank’s measures to reduce speculative activities among banks.
Concerns around ongoing rupee weakness have also led state-run refiners to reduce their utilization of a special foreign exchange credit line introduced to limit spot dollar purchases for oil imports.
Key indicators include:
- One-month non-deliverable rupee forward at 95.32; 1-month NDF points at 35 paisa
- Dollar index at 98.91
- Brent crude futures up 1.7% at $120 a barrel
- Ten-year U.S. note yield at 4.42%
- Foreign investors sold a net $210.7 million worth of Indian shares on April 28, according to NSDL data
- NSDL data indicates foreign investors sold a net $10.9 million worth of Indian bonds on April 28.
Published on April 30, 2026.
