- The rupee fell 10 paise to 95.55 against the U.S. dollar in early trade on Friday, weighed by FII outflows and sustained disruptions in global crude oil supplies.
- On Friday, the rupee opened at 95.54 against the greenback before slipping further to 95.55, down 10 paise from its previous close.
- Importer dollar demand picked up, giving up tepid early gains.
- RBI Governor Sanjay Malhotra flagged inflation risks in MPC Minutes.
- India Ratings raised its FY27 GDP growth forecast to 6.8% from 6.7%.
- The rupee pared initial gains and settled for the day lower by 1 paise at 95.45 against the U.S. dollar on Thursday.
- Forex traders noted that a marginally weaker greenback and a fall in global crude oil prices to levels below $90/barrel prevented a sharper decline in the local unit.
- Foreign institutional investors offloaded equities worth ₹298.26 crore on a net basis on Thursday.
The Indian rupee declined 10 paise to 95.55 against the U.S. dollar in early trade, influenced by rising importer demand and foreign institutional investor (FII) outflows. The rupee opened at 95.54 before slipping further, reflecting a broader trend in the forex market.2
Forex traders noted that the rupee's decline was moderated by a marginally weaker dollar and a drop in global crude oil prices, which fell below $90 per barrel. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, stated, “The rupee is expected to be in a narrow range of 95.40 to 95.60 with the Reserve Bank of India (RBI) protecting the upper end.”
The dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 99.14, down by 0.01%. Meanwhile, Brent crude was trading lower by 0.48% at $89.27 per barrel in futures trade. Market participants are also keeping an eye on U.S. Fed Chair Kevin Warsh's upcoming speech at the Jackson Hole Symposium, which could influence future currency movements.
Overall, the rupee's performance reflects ongoing economic challenges, including inflation risks highlighted by RBI Governor Sanjay Malhotra, who emphasized the need for clarity in rate recalibration.4
“The rupee's fall is cushioned by a weaker dollar index at 99.14 and Brent crude below $90 per barrel, trading at $89.27. RBI Governor Sanjay Malhotra flagged inflation risks in MPC minutes, while India Ratings raised FY27 GDP growth forecast to 6.8%.”
