Indian rupee likely steadied by central bank hand as US tariff pressures linger

MUMBAI: The Indian rupee shuffled near its all-time low on Monday, with possible intervention by the Reserve Bank of India helping it steady against the lingered drag from steep US tariffs.

The currency was last at 88.76 to the dollar as of 10:40 a.m. IST, little changed from 88.7725 in the previous session.

Despite frequent RBI support, it remains Asia’s worst performer this year, down 3%.

Traders said that the rupee may see some relief during the week on account of foreign portfolio inflows spurred by two large initial public offerings slated for this week.

Non-bank lender Tata Capital’s $1.75 billion share sale kicks off on Monday while LG Electronics India will open its $1.3 billion IPO on Tuesday.

Analysts at BofA Global Research reckon that the central bank’s dovish policy commentary last week could also spur inflows into government bonds over the next months.

“However, we see this more as duration play and may have little impact on FX due to larger extent of hedging this time compared with the unhedged passive flows earlier this year,” the analysts said in a note.

While foreign investors have net sold about $18 billion worth of equities over 2025 so far, they have net buyers of government bonds to the tune of around $6 billion.

On the day, India’s benchmark equity indexes, BSE Sensex and Nifty 50 were up 0.3% each while the yield on the 10-year benchmark bond edged down to 6.508%.

Elsewhere, the dollar was steady against major peers but the Japanese yen fell nearly 2%, after Sanae Takaichi won the LDP leadership election at the weekend, setting the country on course for more expansionary fiscal policy.