The Indian rupee and dollar-rupee forward premiums fell on ​Tuesday, driven by opposing forces of importer hedging, foreign portfolio outflows and ‌likely central bank intervention across FX market ​segments.

The rupee ended at 95.2650 per dollar, ⁠down 0.3% from its close in the previous session.

Traders said that the losses would have been steeper had it not been ‌for the Reserve Bank of India’s dollar-selling interventions, which have continued in almost every session since the ‌rupee hit a record low of 96.96 ‌per ⁠dollar in mid-May.

The central bank has conducted these ⁠interventions alongside dollar-rupee buy/sell swaps to manage rupee liquidity and the impact on its foreign exchange reserves.

Dollar-rupee forward premiums fell on Tuesday as ​a result of such swaps, ‌with the 1-year implied yield down 12 basis points at 3.03%. Forward premiums reflect the cost of hedging against rupee weakness.

Despite the interventions, traders reckon the ‌pressure on the rupee will persist in the near ​term as capital flows remain weak and uncertainty over the Middle East conflict keeps oil prices ⁠volatile.

Oil prices fell more than 1% on Tuesday, paring the previous session’s sharp gains, after U.S. President Donald Trump ‌said talks with Iran were ongoing, running counter to a report that Tehran had suspended indirect negotiations with Washington to end hostilities.

The war-sparked disruption of global energy supplies has clouded India’s macroeconomic outlook, leaving the RBI in a policy bind over potentially higher inflation and slower growth as ‌it tries to contain the rupee’s persistent decline.

Economists at J.P. ​Morgan, like a majority of those polled by Reuters, expect the RBI to keep the ⁠key policy rate unchanged at 5.25% at its meeting onFriday.

“Given the ⁠recent weakness in the currency, the RBI is likely to reiterate the “separability” principle under the inflation-targeting regime: ‌Policy rates are used to manage growth-inflation dynamics, while FX volatility is addressed through FX reserves and other ​regulatory measures,” J.P. Morgan said.

Published on June 2, 2026