Rupee Relies on RBI Support Amid Weak Asian Cues and Flow Pressures

The Indian rupee is likely to open weaker on Friday amid a risk-off tone across Asian markets and continued flow-related pressures. Traders, however, note that the central bank is expected to remain active in defending the currency, limiting any sustained move beyond the 92 level.

In the NDF market, the Indian rupee is trading at 91.85-86, after closing at 91.9550 on Thursday.

The rupee slipped to a record low of 91.9925 on Thursday, weighed down by strong dollar demand linked to NDF maturities and a persistent imbalance between dollar demand and supply.

The rupee has fallen around 2.3% so far this month and is on track for its weakest monthly performance since September 2022, pressured by a combination of mainly domestic factors.

India’s benchmark equity indices are expected to open largely flat on Friday, as positive sentiment from the government’s upbeat economic survey is tempered by a weak rupee, continued foreign fund outflows and elevated oil prices.

Gift Nifty futures were trading around 25,405, suggesting the Nifty 50 is set to open close to Thursday’s closing level of 25,418.9.

Investors are now turning their attention to the Union Budget, which Finance Minister Nirmala Sitharaman is set to present in Parliament on Sunday. In view of the budget announcement, markets will remain open for a special trading session on the same day.