MUMBAI (Reuters) – The Indian rupee was little changed on Monday, tracking muted moves in its regional peers, while dollar-rupee far forward premiums dipped on the back of a rise in U.S. bond yields.
The rupee was at 85.51 against the U.S. dollar as 10:45 a.m. IST, barely changed from its previous close of 85.5050.
Other Asian currencies were mostly steady as well, while the dollar index was little changed at 100.8.
U.S. Treasury yields nudged higher after U.S. President Donald Trump’s sweeping tax-cut bill was approved by a key congressional committee.
Nonpartisan analysts said the bill would add $3 trillion-$5 trillion to the nation’s $36.2 trillion in debt over the next decade. On Friday, credit ratings firm Moody’s cited the rising debt for the downgrade to its U.S. credit rating.
“The dollar could weaken while Asian currencies strengthen given the focus on U.S. fiscal sustainability (all things equal and putting tariffs aside),” MUFG Bank said in a note, referring to the downgrade.
Meanwhile, dollar-rupee forward premiums dipped on the back of higher U.S. Treasury yields. The 1-year dollar rupee implied yield fell 3 basis points to 2.06%, while the 1-year U.S. Treasury yield was up 2 bps in Asia trading.
India’s benchmark equity indexes, the BSE Sensex and Nifty 50, were nearly flat while the yield on the country’s benchmark 10-year sovereign bond dipped marginally.
Traders expect markets to remain focused on developments regarding a potential India-U.S. trade deal.
Meanwhile, remarks from Federal Reserve policymakers peppered through the week may offer cues about the future path of Fed policy rates.
Investors are currently pricing in about two rate cuts by the Fed over the rest of 2025.
(Reporting by Jaspreet Kalra; Editing by Varun H K)
