The Indian rupee rose on Wednesday as dollar sales from state-run and foreign banks
blunted pressure from demand tied to the monthly expiry of
exchange traded futures as traders kept an eye on volatile oil
prices.
The rupee rose 0.14% to 95.72 per U.S. dollar,
hovering around its strongest level in two weeks.
Traders pointed to a short burst of dollar sales by a
mid-sized state-run lender, which pulled the rupee modestly
higher even as heightened demand to buy dollars at the daily
reference rate exerted pressure.
The reference rate is the daily benchmark used to settle
contracts and often attracts concentrated dollar buying or
selling.
On Wednesday, the demand was at least partially linked to
the maturity of about $2.7 billion worth of exchange traded
futures, per data from the National Stock Exchange of India.
India’s central bank has been “intervening in the futures
market over the last few sessions, which has reflected in the
buildup in open interest,” a trader at a private bank said. The
open interest rose by about $700 million over the last week.
Meanwhile, Brent crude oil futures climbed nearly 4% after
dropping sharply over the last three sessions as markets cheered
hopes of talks between U.S. and Iran to end their war which
began in late February and continues to rattle global markets.
Those hopes were dampened after joint strikes in Iraq by the
United States and Saudi Arabia, and the interception of Iran’s
ballistic missiles aimed at U.S. forces in the Middle East.
Later in the day, the focus will be on the U.S. Federal
Reserve’s monetary policy decision. Markets are currently
pricing in about a 30% chance of a rate hike.
“Our base case is for a hawkish hold, with the Fed likely to
keep rates unchanged and emphasize that inflation risks remain
high. This could keep US yields and the dollar supported, in
turn weighing on Asia FX broadly,” MUFG said in a note.
Published on July 29, 2026
