Rupee Vs Dollar: The Indian rupee strengthened at the start of Monday’s (February 9) session, opening at 90.56 per dollar compared to 90.66 on Friday (February 6). This further increased the positive momentum seen last week after the success in India-US trade talks.
The currency received support from an interim trade framework jointly released by India and the United States on Friday (February 6), which hinted at a possible reduction in US tariffs on Indian goods and closer economic cooperation. The agreement came after protracted negotiations and helped the rupee reach its best weekly gain in more than three years.
Goldman Sachs analysts said that although complete information is not yet available, they estimate that after taking the exclusions into account, the effective US tariff rate on Indian imports could be about 20 percentage points lower than the earlier 34%.
Market participants said such relief could ease external pressure on the rupee, which has fallen about 3.5% since late August, when the US tariffs were imposed. However, the joint statement did not mention India buying oil from Russia, nor did it include any formal commitment from India to stop them. Traders say that due to this there is some uncertainty in the policy.
Positioning became less bearish
Currency traders said that sentiment had already softened against the rupee last week. A Mumbai-based bank dealer said demand for short bets on the rupee was subdued, reflected in weak non-deliverable forward (NDF) premiums and calm onshore trading conditions.
Still, market participants cautioned that a sustained move below the 90-per-dollar mark is not guaranteed. The next phase of the rupee’s trajectory will largely depend on exporter dollar sales and foreign portfolio flows.
Foreign investors have been net buyers of Indian equities worth about $900 million so far in February, reversing outflows of about $4 billion seen in January. Yet the daily data was uneven—NSDL data showed foreign investors sold $145.2 million in Indian stocks and $2.6 million in bonds on February 5.
Global background remained mixed
The signals from the broader markets were mixed. Asian equities rose after strong election results for Japan’s Prime Minister Sanae Takaichi, although the Japanese yen weakened.
Key indicators remained mostly stable
The dollar index stood at 97.59. Brent crude futures fell 0.7% to $67.6 a barrel, a slight positive for India’s import bill.
The 10-year US Treasury yield remained at 4.22%, keeping global financial conditions tight.
forward market signals
In derivatives trading, one-month NDF was quoted at 90.61, which was slightly weaker than the spot open, reducing expectations of a short-term upside. Onshore one-month forward premium was at 12.75 paise, reflecting steady hedging demand.
what to pay attention to
Traders said the rupee’s short-term path will depend on whether foreign inflows persist, how exporters behave at current levels, and how global risk sentiment changes. For now, the currency has appreciated, but its durability depends solely on flows rather than policy headlines.
What do experts say
Anil Kumar Bhansali, treasury head and executive director, Finrex Treasury Advisors LLP, said, “RBI is playing both sides of the market, selling dollars at a good pace, thus keeping an eye on excessive depreciation, while also keeping an eye on the rise in dollar value after the US-India deal was announced and the terms of reference announced on Saturday, which took the dollar to 90.05. Bought near the level.
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