FX.co ★ Indian Rupee Range-Bound

The Indian rupee maintained stability around 88.6 against the US dollar, trading within a narrow band as the Reserve Bank of India (RBI) continued its strategic interventions to mitigate extreme fluctuations. By defending the crucial 88.80 threshold, the central bank has helped stabilize market sentiment, underscoring the currency's reliance on regulatory backing in the face of sluggish capital inflows, ongoing dollar demand, and external challenges. The rupee has been under strain since the imposition of substantial US tariffs on Indian exports in late August, compounded by sluggish trade negotiations. Recent activity, including renewed dollar sales by the RBI through state-run banks, indicates the authorities are resorting to established measures to prevent significant swings in the currency's value. Nonetheless, experts caution that extended intervention may deter long-term foreign investment. On the monetary policy side, the majority of market analysts continue to anticipate an interest rate reduction by the RBI in December, with some predicting further easing in February, potentially lowering the repo rate to 5%, given a favorable inflation environment.