The Indian rupee was modestly weaker on Tuesday, but remained on course to log a quarter-on-quarter gain, its first since March 2025, as a sharp retreat in oil prices and a salvo of policy measures to draw dollar inflows snapped a spell of decline.
The currency last traded at 94.61 per dollar, down slightly from its close at 94.54 in the previous session. The rupee is up 0.4% on the month and about 0.2% over the course of the quarter ending June 30.
While the currency endured a fall to record low levels near 97 per dollar earlier in the quarter, it has since steadied following a drop in crude oil prices to pre-Iran war levels and a string of central bank and government policy measures that have attracted dollar inflows.
Analysts at Goldman Sachs have raised their 2026 growth forecast for India by 30 bps, lowered their inflation projection by 20 bps and now expect the country to log a balance of payments surplus of 0.7% of GDP.
The improvement in the outlook is expected to stem the rupee's depreciation even as traders maintain that room for gains will be limited by importer dollar demand and potential dollar buying by the central bank to rebuild FX reserves that had dropped to the lowest in a year.
"In the near-term, 94-95 seems to be a comfortable range with a break on either side likely to be driven by global factors like the Federal Reserve's rate path, or by oil prices," a trader at a private-sector bank said.
Elsewhere in Asia, currencies were mostly weaker as well, with the dollar index perched near its strongest levels in a year, supported by simmering expectations of monetary policy tightening by the Fed later this year.
