The Indian rupee rose on Friday, defying subdued ​Asian cues, with caution prevailing ahead of a policy outcome ‌that is expected to steer the currency’s near-term ​outlook.

The rupee opened marginally higher at 95.7125 ⁠and rose to an intraday high of 95.6475, after settling at 95.7850 in the previous session.

The move higher at the open ‌is largely flow-driven, possibly reflecting some position adjustment, a currency trader at a bank said.

“Overall, there ‌will be caution around taking large positions. I ‌would ⁠say the balance of risks is balanced, ⁠with the potential for a big move depending on how the policy turns out,” the trader added.

The Reserve Bank of India is set ​to announce its ‌policy decision around 10:00 am, with markets watching whether a rate hike is warranted amid rising pressure on the rupee and inflation concerns following the oil price ‌jolt triggered by the Iran conflict.

Most economists do ​not expect the central bank to deliver a hike at this meeting.

The space for policy ⁠to remain on pause stems from the fact that the crisis comes at a time when there is ‌excess capacity in the economy, IDFC Bank said in a note, pointing to current account deficit remaining below 1% of GDP for the last three years and core-core inflation staying below 4% for more than two years.

Using interest rates to defend the currency would require sharp ‌hikes and carry significant growth costs, it added.

For the RBI, ​the key challenge will be attracting capital inflows when global conditions are likely to tighten ⁠due to the West Asia crisis, the bank said.

Meanwhile, cues ⁠from Asia were largely negative for the rupee, with most regional currencies down on the ‌day and risk appetite subdued. Markets remained cautious amid worries over a flare-up in Middle East tensions, with ​U.S.-Iran talks still in limbo.

Published on June 5, 2026