The rupee weakened over the last week, declining nearly 0.6 per cent to close at 93.38 against the dollar on Monday. Domestic markets remained shut on Tuesday. The local currency continues to face pressure as key supportive factors fade.

Earlier, the rupee had found some support from banks unwinding dollar positions to comply with the RBI’s cap on Net Open Position (NOP-INR). However, with the April 10 deadline now behind, this source of support is unlikely to persist.

Foreign flows remain a concern. According to NSDL data, net FPI outflows stood at about $1.1 billion over the past week and $6.5 billion so far in April, reflecting continued investor caution. Geopolitical tensions are also weighing on sentiment. The escalation involving Iran, particularly the blockade of the Strait of Hormuz by the US following failed negotiations, has heightened uncertainty and kept risk appetite subdued.

While these factors have pressured the rupee, the dollar has not gained significant traction. Despite the geopolitical developments, the greenback has remained soft, partly due to concerns over the US economy. Recent data showed the US consumer sentiment index falling sharply to 47.60 in April from 53.30 in March, one of the lowest levels on record. In addition, inflation showed signs of picking up, with CPI rising 0.9 per cent in March.

Overall, while both the rupee and the dollar appear weak, relative pressures from geopolitical risks and capital outflows are likely to keep the rupee on the defensive in the near term.

Chart 

The rupee rallied to mark a three-week high of 92.24 last Wednesday But the local unit reversed the trend and closed at 93.38 on Monday. As the broader trend is bearish, the recent fall off the 92.24 level might indicate that the rupee has resumed the downtrend.

Nevertheless, there is a support ahead at 93.50. If this level is taken out, the Indian currency can fall further to 94. On the other hand, if there is a rally, it can retest 92.24. A breakout of this can lift it to 92, a notable resistance. 

The dollar index was down one-third of a per cent on Monday, leading to the breach of a support at 98.70, where the 50-day moving average and the 50 per cent Fibonacci retracement of the previous rally coincides. So, the break down is a significant and the dollar index might remain weak, at least in the near -term.

The nearest notable support for the dollar index is at 98 followed by 97.50. If there is a decline to these levels, the rupee will have room to appreciate, potentially to 92.

The dollar index will gain bullishness only if it reclaims 98.70. If that happens, the rupee can slip to 94.

Outlook 

Overall, the rupee may remain under pressure, but the softness in the dollar could limit further downside. In the near term, the local currency may consolidate with a mild recovery bias towards 92.50–92.24. However, a sustained move beyond this is uncertain, and a rebound in the dollar index could push the rupee back towards 93.50–94.

Published on April 14, 2026