Indian rupee to build on rally after RBI chief reinforces currency support

Business Recorder reported that the Indian rupee is set to extend gains on Wednesday after Governor Sanjay Malhotra said further measures remain an option. Traders expect the currency to open between 95.04 and 95.12, after it settled at 95.28 against the dollar on Tuesday. The rupee has risen 1.5% over the last two sessions following a series of RBI measures aimed at easing dollar demand and supply imbalances.

In a media interview on Tuesday, Malhotra defended recent forex curbs as a way to discourage speculative bets, while keeping hedging access for businesses with genuine exposure. He signalled readiness for further action to keep the rupee moving in an orderly way. The governor noted that monetary policy is not normally used for financial stability, though the two are closely linked.

Bankers read the comments as hawkish, with two saying they strengthened the case for a December rate hike and one citing a possible 50 basis point increase. A currency trader argued that the core factors are still working against the rupee, naming oil costs and soft capital inflows. Oil prices kept rising on Wednesday as supply concerns persisted, and traders weighed the impact of fighting between the Houthis and Saudi Arabia.