Indian Rupee Forecast to Open Under Pressure Amid Weaker Asian Peers

The Indian rupee is expected to open the week in a subdued position, influenced by the broader trend of weakening Asian currencies. . This has limited the rupee's downward movement and kept the USD/INR pair within a narrow range, reinforcing the central bank’s active role in stabilizing the currency.

The 1-month non-deliverable forward for the rupee indicates a largely flat opening against the U.S. dollar, . Market participants anticipate a continuation of this rangebound behavior, with the rupee constrained by both regional currency pressures and the RBI's firm stance. A lack of significant directional momentum was noted by traders, with one FX spot trader commenting on the "distinct lack of energy" in the market. As long as there is no new catalyst, the range is expected to persist.

Last week’s trading pattern reflected the tight control the RBI has exerted, . This suggests a highly managed environment, where predictable central bank interventions have kept volatility in check. Analysts note that a meaningful shift in the currency’s trajectory is unlikely unless the USD/INR crosses the 88.80 threshold and reaches new record lows.

In the broader region, Asian currencies faced downward pressure on Monday, with the Taiwanese dollar and the South Korean won among the hardest-hit. The dollar index edged higher, driven by investor focus on upcoming U.S. economic data. The September , scheduled for Thursday, is seen as a potential turning point for the ’s monetary policy outlook.

Meanwhile, India experienced mixed capital flows, . These figures highlight the dual nature of foreign investor sentiment, where equity inflows provide some support while bond outflows signal caution.

The rupee’s near-term trajectory will depend largely on a combination of global macroeconomic signals and the RBI’s ability to manage local demand for the U.S. dollar. Until there is a definitive shift in either direction, .