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The rupee depreciated 28 paise to close at 88.13 (provisional) against the U.S. dollar on Thursday (September 18, 2025), on hawkish Fed and a bounce back in the U.S. dollar.
Forex traders said traders assessed the U.S. FED outlook following a rate cut. The U.S. FED reduced rates by a quarter point as expected and indicated that it will steadily lower borrowing costs for the rest of the year.
Moreover, the rupee remained under pressure on worries over U.S. tariffs on India and global trade uncertainties. Besides, sustained foreign fund outflows also dented investor sentiments.
At the interbank foreign exchange, the rupee opened at 87.93 against the U.S. dollar and touched an intra-day low of 88.16 before ending the session at 88.13 (provisional), down 28 paise from its previous close.
On Wednesday (September 17, 2025), the rupee appreciated 24 paise to close at 87.85 against the U.S. dollar.
The Indian rupee declined sharply on hawkish Fed and a bounce back in the U.S. dollar. Fed cut interest rates by 25 bps, in line with estimates. It sees two more 25 bps rate cut in 2025 and just one 25 bps rate cut in 2026.
“Fed Chair Jerome Powell does not see elevated financial risks on tariffs. However, he raised downside concerns over labour market and GDP growth,” Anuj Choudhary, Research Analyst Currency and commodities Mirae Asset ShareKhan, said.
Mr. Choudhary added that positive domestic markets and expectations of fresh FII inflows may also support the rupee. However, any recovery in the U.S. dollar and/or U.S. treasury yields may cap sharp upside.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.02% to 96.89.
Brent crude, the global oil benchmark, was trading 0.43% lower at $67.66 per barrel in futures trade.
On the domestic equity market front, the Sensex jumped 320.25 points to settle at 83,013.96, while the Nifty rose 93.35 points to 25,423.60.
Foreign Institutional Investors sold equities worth ₹1,124.54 crore on a net basis on Wednesday (September 17, 2025, according to exchange data.
Meanwhile, Union Commerce Minister Piyush Goyal on Wednesday (September 17, 2025) expressed confidence that India’s exports would grow around 6% this year compared to the corresponding period in 2024.
Underscoring the country’s strong performance in global trade despite challenges, the minister said discussions on free trade agreements (FTAs) were advancing with several countries.
“India’s exports would grow around 6% this year compared to the corresponding period last year. I believe we will end the year on a positive note,” Mr. Goyal said, adding that discussions on free trade agreements (FTAs) were advancing with several countries.
Published – September 18, 2025 04:51 pm IST
