The Indian Rupee (INR) extended its rally on Tuesday, supported by the Reserve Bank of India’s (RBI) intervention to curb significant depreciation of the local currency. The INR also gained some traction from a recovery in crude oil prices, with India being the world’s third-largest oil consumer. However, the sustained outflow of foreign funds and renewed demand for the US Dollar (USD) may continue to weigh on the Rupee.
Foreign investment outflows have been a key factor, with $3.3 billion in net withdrawals from Indian stocks and bonds so far in November, adding to the $11.4 billion outflow in October. India’s foreign exchange reserves have also been on the decline, falling to $675.65 billion, down from a peak of $704 billion in late September.
Despite these challenges, the INR remains supported for the time being, with traders focusing on risk sentiment and remarks from US Federal Reserve official Jeffrey Schmid. In the absence of major US economic data releases on Tuesday, market attention will likely remain on broader economic trends.
On the positive side, the outlook for the Indian economy remains resilient. Moody’s Ratings has forecasted a 7.2% growth for India in 2024, driven by a recovery in household spending and easing inflation pressures. Meanwhile, DBS Bank projected a moderation in economic growth to 6.0% in 2025-2026.
From a technical perspective, the USD/INR pair continues to trade above its key 100-day Exponential Moving Average (EMA) and remains bullish, with the 14-day Relative Strength Index (RSI) hovering around 67.00, suggesting that support is likely to hold. The pair’s next major resistance is at the all-time high of 84.45, with a break above this level opening the door for a potential move towards the 85.00 psychological mark.
On the downside, the 84.35 level serves as initial support, with further declines potentially pushing the pair toward 84.00 and 83.89, near the 100-day EMA.
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