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The rupee rebounded from its lowest-ever level and settled 8 paise higher at 86.62 (provisional) against the U.S. dollar on Tuesday (January 14, 2025) as the American currency retreated from record high.
Some recovery in domestic equity markets after the release of macroeconomic numbers also supported the Indian currency even though it remained under pressure due to elevated crude oil prices and continuous outflow of foreign funds.
At the interbank foreign exchange, the rupee opened at 86.57 and touched the intra-day high of 86.45 before closing for the day at 86.62 (provisional) against the greenback, registering a gain of 8 paise from its previous close.
On Monday (January 13, 2025), the rupee logged its steepest single-day fall in nearly two years and ended the session 66 paise down at its historic low of 86.70 against the U.S. dollar. The currency’s previous record one-day fall of 68 paise was witnessed on February 6, 2023.
The local unit has plunged more than Re 1 in the past two weeks from the closing level of 85.52 on December 30. It had breached the 85-per-dollar mark for the first time on December 19, 2024.
The unit had depreciated 18 paise to settle at 86.04 against the U.S. dollar on Friday (January 10, 2025), a day after registering a marginal gain of 5 paise. In the preceding back-to-back sessions on Tuesday (January 7, 2025) and Wednesday (January 8, 2025), it had plunged 6 paise and 17 paise, respectively.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee recovered from all-time lows on a slight bounce back in the domestic markets and a weak U.S. dollar.
“Cooling retail inflation and easing dollar brought some respite to the falling rupee,” he said, but added that the Indian currency is expected to remain weak as crude oil prices continue to remain elevated, raising inflationary pressures.
“Traders may take cues from PPI (producer price index) data from US today and CPI data from US tomorrow. USD-INR spot price is expected to trade in a range of ₹86.40 to ₹86.85,” Mr. Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.39% lower at 109.38.
Brent crude, the global oil benchmark, rose 0.10% to $81.09 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex climbed 169.62 points, or 0.22%, to settle at 76,499.63 points, while the Nifty rose 90.10 points, or 0.39%, to 23,176.05 points.
Foreign institutional investors (FIIs) offloaded equities worth ₹4,892.84 crore on Monday (January 13, 2025).
Government data released on Tuesday (January 14, 2025) showed, wholesale price inflation rose to 2.37% in December 2024, led by a spike in manufactured products even though prices of food items eased.
Retail inflation, however, declined to a four-month low of 5.22% in December amid easing of prices in the food basket, giving headroom to the Reserve Bank of India (RBI) to reduce the key interest rate in upcoming monetary policy reviews, according to the data released on Monday (January 13, 2025).
The inflation based on the Consumer Price Index (CPI) eased for the second month in a row after it breached the RBI’s upper tolerance level of 6% in October.
Published – January 14, 2025 05:10 pm IST
