The SAR to INR exchange rate has recently reached 90-day highs near 23.69, marking a 0.9% increase above its three-month average of 23.49. The rate has exhibited stability, trading within a narrow range of 2.2% from 23.19 to 23.69, indicating a consolidated market position.
Analysts have noted that the Saudi riyal remains firmly pegged to the U.S. dollar, set at 1 USD = 3.75 SAR. This fixed exchange rate provides a crucial foundation for the riyal against currencies like the Indian rupee, which has been affected by various market pressures.
In recent weeks, the Indian rupee experienced notable fluctuations in response to the Reserve Bank of India's (RBI) market intervention. On October 15, the RBI sold between $3 billion and $5 billion to bolster the rupee amidst rising pressures from U.S. tariffs and increased gold imports. This action resulted in the rupee's largest one-day gain in four months, signaling a potential shift in investor sentiment and an increased demand for rupee call options, which may strengthen its position going forward.
The deteriorating trade relations between the U.S. and India due to significant tariffs imposed on Indian exports are contributing to ongoing volatility in the INR. As the U.S. dollar remains strong, influenced by rising yields from U.S. Federal Reserve policies, the INR could experience further challenges unless trade relations normalize or external market conditions improve.
Currency forecasters suggest that the riyal's stability due to its peg against the dollar could maintain its relative strength against the INR. However, as Indian economic fundamentals continue to evolve with the RBI's interventions and trade dynamics, the SAR/INR pair may experience fluctuations. Businesses and individuals engaged in currency transactions should stay informed of these developments as they navigate international transactions, potentially seeking opportunities when the rate is favorable.
