Rupee opens marginally stronger against dollar: What is driving the move

The rupee opened at 90.65 per dollar on Wednesday (February 18), marginally stronger than Tuesday’s (February 17’s) close of 90.67, as traders balanced softer regional currencies with continued support from the Reserve Bank of India (RBI).The one-month non-deliverable forward market signalled an opening in the 90.66–90.70 range, close to the previous settlement of 90.6725, indicating limited volatility at the start of trade.

Central bank presence caps upside
Market participants said the RBI has been selling dollars in the 90.70–90.80 band in recent sessions, effectively capping further gains in the dollar/rupee pair.
Dealers noted that the central bank has supplied dollars through the interbank order-matching system, absorbing demand and anchoring expectations around those levels.Traders said this approach differs from an earlier phase when the RBI reportedly acted before local market hours to influence opening sentiment. The current strategy appears focused on managing moves during the trading session.

According to a Mumbai-based currency trader, the RBI’s repeated presence around these levels signals resistance to further depreciation for now and discourages bets on a move toward 91.

Global cues in focus

Elsewhere, most Asian currencies edged lower, while the dollar index hovered near 97.20. The U.S. currency drew support after Federal Reserve Governor Michael Barr indicated that policymakers may keep rates unchanged for some time due to inflation risks.

Markets are pricing in around two rate cuts by the Federal Reserve this year, with June seen as the likely starting point. Investors await the minutes of the Fed’s latest meeting for additional clarity on the policy outlook.