The rupee snapped a six-session gaining streak on Monday, weighed down by dollar demand from importers and outflows linked to ICICI Asset Management Company, dealers said.
Market participants said dollar demand linked to outflows following the expiry of the lock-in period for ICICI Asset Management Company’s initial public offering (IPO) weighed on the domestic currency during the day.
The domestic currency fell to an intraday low of 94.75 per dollar before settling at 94.68 per dollar, against the previous close of 94.33 per dollar.
The decline came despite Brent crude oil prices remaining below recent highs and global risk sentiment improving on expectations of progress in talks between the US and Iran. Dealers said importers stepped up dollar purchases at lower levels, while exporters remained cautious about selling aggressively.
“The Indian rupee fell on account of outflows from ICICI AMC, taking the rupee to a low of 94.75 per dollar as the dollar index reached a level of 101, while the euro, pound sterling and Japanese yen all fell and continued to remain lower against the dollar,” said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
The dollar index rose to around 101, while the euro, pound sterling and Japanese yen weakened against the greenback. Dealers said foreign currency non-resident (FCNR) and external commercial borrowing (ECB)-related inflows continued to support the rupee, though dollar demand from oil marketing companies and foreign portfolio investors limited gains.
The rupee has remained within a 94.10-94.80 per dollar range in recent sessions, with the 94.10 level continuing to provide support despite intermittent dollar sales linked to inflows, market participants said. It has depreciated 5.07 per cent in the current calendar year. In 2026-27 (FY27), however, the local currency appreciated 0.14 per cent.
In the previous six trading sessions, the rupee had gained nearly 1 per cent, supported by lower crude oil prices, improving risk appetite and expectations of foreign capital inflows.
Dealers expect the currency to remain range-bound in the near term as inflows and importer demand continue to offset each other.
“The rupee is expected to remain in the current range because even if the inflows are coming on the debt side, there is still demand for dollars among importers,” said a dealer at a state-owned bank.