FX.co ★ Indian Rupee Set for Strong Weekly Gain

The Indian rupee remained steady around 88 per USD on Friday, maintaining its position near a four-week high and gearing up for its most significant weekly advance since late June. This stability came as the Reserve Bank of India took decisive action against aggressive selling, making short sellers wary. In a strategic move, the central bank intervened by offloading dollars through state-owned banks, which alleviated the pressure on the rupee. This intervention helped counterbalance adverse effects from US-imposed tariffs, stricter immigration regulations, capital outflows, and the increased cost of gold imports.

Investors also assessed the mixed developments in US-India trade relations. Tensions have been ongoing since the US implemented a 50% tariff on Indian goods, responding to New Delhi’s imports of Russian oil. However, recent remarks by President Trump indicated a potential resolution when he mentioned that Prime Minister Modi had pledged to cease such imports. Contrarily, India's Foreign Ministry reported that they were not aware of any such discussion, while New Delhi asserted that Russian oil purchases would persist if they remain economically feasible. Dialogues with the US are reportedly ongoing, according to officials.