Rupee Steadies At 89.56 As RBI’s Surprise Swap Jolts Forward Market

The rupee began today’s session on a mildly positive note, opening at 89.56 against the US dollar after closing a shade weaker in the previous session. The move reflects a mix of steady risk sentiment and a recalibration in the forwards market following the Reserve Bank of India’s latest dollar liquidity operation.

Forward premiums, which had spiked on Tuesday amid expectations of tighter dollar conditions, have since cooled as the RBI announced a buy-sell swap in USD/INR. The operation effectively reassures markets that authorities are prepared to smoothen volatility and manage FX liquidity, prompting traders to mark down premia on near-term contracts.

Key Market Takeaways

• Spot rupee opens at 89.56 per dollar, about 0.1% stronger than the prior close.
• USD/INR November month-end premium now around 2.42 rupees, easing from a recent peak near 2.78 rupees.
• USD/INR January month-end premium has slipped to roughly 0.41 rupee, down from about 0.58 rupee seen on Tuesday.
• Forward premiums have retreated after the central bank signalled a USD/INR buy-sell swap, reducing bets on a prolonged dollar squeeze and calming carry trades.

Sources: RBI