Indian rupee to mark time with traders seeking visibility on New Year flows

MUMBAI: The Indian rupee is likely to open largely flat on Friday, with traders settling into a wait-and-see mode as they assess the New Year flows after a year dominated by central bank intervention and underlying dollar demand.

The non-deliverable forward indicated the rupee will open in the 89.94-89.96 range versus the U.S. dollar, having settled at 89.9625 on Thursday.

The rupee was the worst-performing Asian currency in 2025, and volumes are expected to remain thin at the onset of the New Year, with traders assessing the pace and mix of dollar flows.

In the absence of any cues, traders said routine flows are likely to drive price action.

“Until there is a shift in participation, the bias (on dollar/rupee) remains to move higher slowly rather than break lower, with dips likely to attract interest,” a currency trader at a private bank said.

Looking ahead to the first quarter of 2026, traders said the rupee’s direction will hinge primarily on news flows around a potential U.S.–India trade agreement and the behaviour of foreign portfolio investors, both of which could alter the flow that weighed on the currency last year.

Moves in the dollar index and performance of Asian peers are expected to play a secondary role.

Most Asian currencies began the New Year on a weak footing, with the Chinese yuan an exception. The yuan outperformed the rupee decisively last year, rising roughly 5% while the Indian currency shed about the same amount.