The Indian rupee climbed on Tuesday on dollar sales by state-run banks and supportive Asian cues, though bankers said importers used the move to step up hedging.
The rupee rose to an intraday high of 90.09, up from 90.2750 on Monday, supported by state-run bank dollar offers and a change in the way the daily fixing was quoted.
The fixing, which reflects the premium or discount bankers are willing to pay to buy or sell dollars at the Reserve Bank of India's reference rate, was quoted at a discount on the day, compared with a premium on most recent sessions.
A discount typically signals heavier interest in selling dollars at the RBI reference rate.
Meanwhile, a few bankers said the dollar offers from state-run banks could have been on behalf of the Reserve Bank of India, while others said there was no obvious evidence of central bank involvement.
Two bankers said the RBI may have sold dollar/rupee in the offshore non-deliverable forward market, while further noting that foreign banks were seen selling the pair. Bankers broadly agreed, however, that importers were using the rupee's mild recovery to lock in hedges. "The decent dips (on dollar/rupee) are still used to hedge (by importers) ... that behaviour hasn't really changed," a banker said.
"The 90 level will act as a big support, with good buying interest likely to emerge there," he added.
Asian cues were mixed for the rupee, with the dollar index extending the pullback from Monday, while Asian currencies traded in a narrow and rangebound fashion. The focus this week is on a raft of U.S. economic data, particularly the U.S. jobs report due on Friday, for clues on how many times the Federal Reserve is likely to cut interest rates in 2026.
