Rupee closes at 95.21 vs USD, falls on-week as merchant, NDF-linked flows blunt dollar retreat

The rupee closed at 95.21 per dollar, declining nearly 1% on the week and slipping past the 95 mark for the first time in three weeks, pressured by NDF-linked flows and large merchant payments. Improved foreign portfolio inflows into government bonds, expectations of a balance of payments surplus for FY27, and RBI FX measures including incentives for dollar deposits and overseas borrowings have improved underlying sentiment. ICICI Bank is reportedly considering its first dollar bond sale in nearly nine years, following issuances by HDFC Bank and Axis Bank using the central bank's lower-cost hedging facility.