Rupee falls 12 paise to close at 86.82 against U.S. dollar

The rupee depreciated 12 paise to close at 86.82 (provisional) against the U.S. dollar on Tuesday (July 29, 2025), weighed down by a jump in the U.S. dollar index and a surge in crude oil prices.

Forex traders said month-end dollar demand from Oil Marketing Companies (OMCs) and importers further pressurised the rupee.

Moreover, investors remained on the sidelines ahead of the U.S. Federal Reserve and Bank of Japan’s monetary policy decision this week.

At the interbank foreign exchange, the domestic unit opened at 86.76 against the greenback and touched an intra-day low of 86.92 against the greenback.

At the end of Tuesday’s (July 29, 2025) trading session, the local unit settled at 86.82 (provisional), down 12 paise over its previous closing price.

On Monday (July 28, 2025), the rupee had settled at 86.70 against the dollar.

“The Indian rupee fell by nearly 20 paise on a jump in the U.S. dollar index and a surge in crude oil prices. The U.S. dollar rallied on optimism over the U.S.-EU trade deal. However, a bounce back in the domestic equities after falling sharply over the past three sessions cushioned the downside,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.

Forex traders said investors traded cautiously awaiting the outcome of India-U.S. trade talks ahead of the August 1 deadline.

“The lingering trade deal between India and the U.S. may continue to weigh on the rupee. Rising crude oil prices and foreign outflows may also pressurise the rupee. FIIs have offloaded stocks worth nearly ₹37,000 crore till date, the biggest selling since February 2025,” Mr. Choudhary added.

If the discussions fail or get delayed, Indian exporters could face fresh pressure — adding to the rupee’s challenges.

However, if a deal is reached, it could offer a much-needed breather. Until then, the uncertainty is likely to keep market participants cautious.

“Month-end dollar demand from OMCs and importers may further pressurise the rupee,” Mr. Choudhary said, adding, “investors may remain cautious ahead of the U.S. Federal Reserve and Bank of Japan’s monetary policy decision this week.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose marginally by 0.13% to 98.75.

Brent crude, the global oil benchmark, went up by 0.46% to $70.36 per barrel in futures trade, as developing trade agreements eased tariff concerns and boosted future energy demands.

In the domestic equity market, the 30-share BSE Sensex advanced 446.93 points, or 0.55%, to close at 81,337.95, while the Nifty rose 140.20 points, or 0.57%, to settle at 24,821.10.

Foreign institutional investors (FIIs) offloaded equities worth ₹6,082.47 crore on a net basis on Monday (July 28, 2025), according to exchange data.