MUMBAI – The Indian rupee concluded a volatile trading session on Wednesday slightly weaker against the U.S. dollar, as a mix of corporate dollar demand and likely Reserve Bank of India (RBI) interventions tugged the currency in different directions.

The rupee closed at ₹90.2950 per dollar, down modestly from ₹90.19 in the previous session. Early gains during the day were driven by central bank support and foreign banks’ dollar sales, but these were offset later by an uptick in corporate hedging activity.

RBI Intervention and Corporate Dollar Demand

During early trading, the rupee touched a peak of ₹90.03 per dollar, supported by RBI intervention and coordinated dollar sales by foreign banks. However, the gains were largely reversed as corporate entities stepped up dollar hedging to mitigate future currency risks.

A trader at a major bank noted that positional adjustments following the RBI’s $10 billion buy/sell FX swap also contributed to the fluctuation, reflecting the ongoing influence of both regulatory measures and corporate demand on USD/INR movements.

Rise in Dollar-Rupee Far Forward Premiums

In parallel, dollar-rupee far forward premiums rose, with the 1-year implied yield peaking at 2.78%, the highest since late December 2025, before easing slightly. Analysts attributed the rise to increased corporate hedging and market positioning following RBI interventions.

Far forward premiums indicate the cost of hedging dollar exposure and are closely watched by exporters, importers, and financial institutions seeking to manage currency risk in the medium term.

Indian Equities Lag Regional Peers

Indian equities also experienced mild pressure, with the Nifty 50 index dipping 0.3%, underperforming regional counterparts. In contrast, MSCI’s gauge of Asian shares outside Japan rose 0.5%, reflecting a broader regional uptrend.

Asian currencies were generally flat to modestly stronger. The Japanese yen fell to its weakest level in 18 months against the U.S. dollar, prompting speculation that Japanese authorities might intervene to stabilize the currency.

Global Dollar Trends and Fed Developments

The U.S. dollar index was slightly lower at 99.1, as markets awaited remarks from a slate of Federal Reserve officials later in the day. Market attention also remains on developments surrounding the Trump administration’s threat of indictment against Fed Chair Jerome Powell, which Powell has described as intimidation intended to pressure the Fed to cut interest rates.

MUFG analysts warned that such developments could act as a “slow-burn negative” for the U.S. dollar, potentially encouraging global reserve managers to reduce their USD holdings.

Outlook for USD/INR and Indian Markets

Analysts note that the combination of RBI interventions, corporate dollar demand, and global dollar trends will continue to influence the rupee’s near-term trajectory. Market participants are closely monitoring foreign exchange flows, forward premiums, and U.S. policy developments to gauge potential impacts on Indian financial markets and export-import activity.