Indian Rupee Opens Higher Ahead of RBI Policy Meeting, Gains Despite Weak Asian Currencies

The Indian rupee opened on a positive note on Monday, September 30, strengthening by 6 paise against the U.S. dollar, even as most Asian currencies faced downward pressure. The currency began trading at 88.6975 per dollar, compared with the previous close of 88.7612 & as of now trading at 88.7797.

Rupee Opens Strong Despite Asian Weakness

The movement comes a day before the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) announces its October policy decision. Market sentiment has turned cautious as investors await the outcome of the meeting scheduled for October 1.

Experts Expect RBI to Hold Rates Steady

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According to a poll conducted by Moneycontrol involving economists, treasury heads, and fund managers, the RBI MPC Meeting is expected to keep interest rates unchanged in the upcoming review. Most experts believe the central bank will draw comfort from strong first-quarter economic growth while continuing to assess the impact of Goods and Services Tax (GST) reforms.

Across Asia, currencies struggled in early trade. The South Korean won slipped 0.18%, while the Thai baht fell 0.15%. The Indonesian rupiah and Singapore dollar weakened 0.08% each, and both the Chinese renminbi and Japanese yen edged lower by 0.04%, Bloomberg data showed.

Analysts suggest that the rupee may find support from the interest rate differential between India and the United States. Amit Pabari, Managing Director at CR Forex Advisors, noted, “As the Fed is all set to cut rates in its next monetary policy meeting, while the RBI is expected to keep rates steady, this interest rate differential could provide some support to the rupee.”

Global Trade Moves Add to Market Caution

Meanwhile, international developments added another layer of uncertainty. On September 29, U.S. President Donald Trump announced plans to impose steep tariffs on foreign-made films and furniture, industries he claimed had been undermined by overseas competition. In a post on Truth Social, Trump accused other nations of “stealing” America’s movie industry, saying California had been hit particularly hard. He pledged to introduce a 100% tariff on all films produced outside the United States.

Trump stated, “Our movie-making business has been stolen from the United States of America, by other countries, just like stealing candy from a baby.”

The global policy backdrop, combined with India’s domestic monetary stance, is expected to shape currency market movements in the near term. Investors are now closely watching the RBI’s policy decision, which will provide greater clarity on interest rates and future economic direction.

Conclusion

Despite pressure on other Asian currencies, investor optimism is highlighted by the rupee's modest increase ahead of the RBI policy review. The currency might get some support because the Fed is probably going to lower interest rates, and the RBI is probably going to stay the same. Global trade risks, including new U.S. tariffs, continue to be important determinants of market sentiment, nevertheless.