The rupee fell 7 paise to settle at 89.94 (provisional) against the U.S. dollar on Thursday (January 8, 2026) weighed down by a host of factors, including higher crude oil prices, foreign fund outflows and a stronger U.S. dollar.

The apprehension of any further tariffs by the U.S. and weak sentiments at the domestic equity markets further pressured the local unit, forex traders said.

At the interbank foreign exchange, the rupee opened at 89.96 and traded in the range of 89.73 to 90.13. It eventually settled at 89.94 (provisional), down 7 paise from its previous close.

“India faces big trouble on its exports if the U.S. increases tariffs by even 10 bps [basis points], as sentimentally it changes from ‘the deal in pipeline’ to ‘back to square one’. RBI shorts in the markets will keep the dollar buying sentiment,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

The rupee is expected in the range of 89.80 to 90.30 on Friday (January 9), he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02% higher at 98.70.

Read | Is India’s 8.2% growth rate sustainable?

Brent crude, the global oil benchmark, was trading 0.85% higher at $60.47 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex tanked 780.18 points to settle at 84,180.9, while the Nifty fell 263.90 points to 25,876.85.

Foreign institutional investors (FIIs) offloaded equities worth ₹1,527.71 crore on Wednesday (January 7), according to exchange data.

The government, in its latest estimate on Wednesday (January 7), projected the country’s GDP to grow by 7.4% in the current fiscal year, maintaining its status as the world’s fastest-growing major economy despite punitive U.S. tariffs and geopolitical tensions.

The First Advance Estimates released by the Ministry of Statistics and Programme Implementation put GDP growth in 2025-26 at better than 7.3%, forecast by the RBI and the government’s initial projection of 6.3-6.8%.

The rupee depreciated 16 paise to 90.11 against the U.S. dollar in early trade on Monday (December 8, 2025), weighed down by elevated crude oil prices and persistent foreign fund outflows.

Forex traders said strong dollar demand from corporates, importers and foreign portfolio investors pressurised the rupee.

At the interbank foreign exchange, the rupee opened at 90.07 against the U.S. dollar then dropped to 90.11, down 16 paise from its previous close.

On Friday (December 5, 2025), the rupee settled at 89.95 against the U.S. dollar, after the Reserve Bank of India cut the key policy interest rate for the first time in six months.

Forex traders said investors’ focus has now shifted to the Fed’s policy outcome on December 9–10. Markets are placing nearly a 90% probability on a rate cut next week.

Meanwhile, India and the United States will commence three-day talks on the first phase of their proposed bilateral trade agreement here from December 10.

“The US team is in India on 10th December and simultaneously the EU team is also in India to meet the Commerce Minister on trade negotiations and finalising an FTA. We await for positive outcomes on both counts. ” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Mr. Bhansali further noted that, FPIs continue to remain sellers despite the India equities going up. The dollar index is range bound, Asian currencies are range bound, so there are no specific cues from any front.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.11% lower at 98.88. Brent crude, the global oil benchmark, was trading higher by 0.17 cent at $63.85 per barrel in futures trade.

On the domestic equity market front, the benchmark sensitive index Sensex declined 215.73 points to 85,741.24 in early trade, while the Nifty was down 64.85 points to 26,121.60.

Foreign Institutional Investors sold equities worth ₹438.90 crore on Friday (December 5, 2025), according to exchange data.