Asian currencies steady, dollar flat as U.S. shutdown begins; rupee edges up after RBI holds rates
Most Asian currencies and the U.S. dollar moved sideways on Wednesday as investors reacted to the start of a U.S. government shutdown. The Indian rupee gained slightly after the Reserve Bank of India (RBI) left interest rates unchanged, in line with market expectations.
The U.S. Dollar Index, which tracks the greenback against major peers, was flat in Asian trading. Dollar Index Futures also showed no significant change as of 05:00 GMT.
RBI keeps rates steady at 5.50%
The Reserve Bank of India kept its key repo rate at 5.50% on Wednesday, maintaining a neutral stance amid mixed signals on growth and inflation. The decision was unanimous from the six-member Monetary Policy Committee.
The RBI cited easing price pressures, recent tax cuts, and a more stable inflation outlook. Governor Sanjay Malhotra said the central bank will continue monitoring global and domestic conditions before adjusting policy.
Following the announcement, the rupee slipped 0.2% against the dollar but stayed near record highs. The RBI has intervened heavily in recent weeks to stabilize the currency, though ongoing global uncertainty continues to weigh on the INR. Analysts noted that a surprise rate cut could have added pressure on the rupee.
U.S. government shutdown begins
The U.S. government entered a partial shutdown at midnight after Congress failed to pass a funding measure. The Senate rejected a Republican-backed bill in a 55–45 vote, falling short of the 60 votes needed.
President Donald Trump defended the shutdown, describing it as a chance to make “irreversible” spending cuts. He hinted at closing federal programs and possible layoffs, comments that unsettled investors concerned about the job market.
The shutdown has also cast doubt on the release of key U.S. economic data, including this week’s nonfarm payrolls report.
Asia FX trades flat amid uncertainty
Elsewhere in Asia, currencies traded in narrow ranges. The Japanese yen (USD/JPY) was flat, while the Singapore dollar (USD/SGD) rose 0.1%.
The South Korean won (USD/KRW) gained 0.3%, and the Chinese yuan (USD/CNY) stayed unchanged. The Australian dollar (AUD/USD) slipped 0.3%, giving up gains from the previous session after the Reserve Bank of Australia left rates unchanged at 3.6%.
