Rupee expected to open lower on outflows and oil prices
The Indian rupee is set to open weaker on Wednesday as steady dollar demand from equity outflows and importer payments weighs on the currency. Rising Middle East tensions and higher oil prices have soured risk appetite while markets await U.S. inflation data.
The India rupee is projected to open weaker between 95.40 and 95.44 per dollar on Wednesday, June 10. This follows a Tuesday settlement of 95.35 as persistent equity outflows and importer demand offset recent RBI interventions. Investors face a tightening liquidity environment as the currency sits just 0.2% above levels seen before the RBI's latest support measures.
### Equity Outflows Erase Policy Gains Foreign investors sold over $6B of Indian equities so far this month, already exceeding the total outflows recorded in May. This selling pressure has stalled the momentum generated by the RBI's Friday policy rollout intended to attract capital. Bankers noted that steady dollar demand for importer payments continues to weigh on the currency's recovery.
