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The rupee recovered 13 paise from its all-time low closing level to 86.98 against the US dollar in early trade on Tuesday (Feburary 4, 2025), after President Donald Trump agreed to pause tariffs on Mexico and Canada for 30 days.

Forex traders said the US dollar index, which had surged past 109.88 level, retreated to 108.74 after Trump announced the temporary pause on tariffs.

At the interbank foreign exchange, the rupee opened at 86.98 against the greenback, registering a rise of 13 paise from its previous close.

On Monday, the rupee plunged 49 paise to close at an all-time low of 87.11 against the US dollar.

“The Indian rupee opened near to 86.98 on Tuesday after relief from Mr. rump’s tariffs overnight on reaching an agreement with Canada and Mexico.

“The range for the day is expected between 86.80 to 87.20 with dips to be bought. Premiums rose on Monday after the Reserve Bank of India set the cut off for 6 months swap higher than market expectations,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Mr. Trump on Monday (February 3, 2025) held off on his tariff threats against Mexico and Canada for 30 days after they pledged to boost border enforcement.

Meanwhile, Finance Minister Nirmala Sitharaman on Monday (February 3, 2025) said the value of Indian rupee is market-determined, and there has been no devaluation, which is a feature of a fixed exchange rate regime.

The rupee has been falling in recent weeks, and on Monday (February 3, 2025) touched an all-time intraday low of 87.29 against the American currency.

Reacting to the development, Finance Secretary Tuhin Kanta Pandey said there is no concern over the rupee value and the Reserve Bank of India is managing the volatility of the local currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22 per cent lower at 108.74.

Brent crude, the global oil benchmark, fell 0.57 per cent to USD 75.54 per barrel in futures trade.

A vendor counts Indian rupee notes in Mumbai. File photo
| Photo Credit: AFP

The rupee depreciated 4 paise to 86.61 against the US dollar in early trade on Wednesday (January 29, 2025), due to sustained foreign fund outflows, unabated dollar demand from oil importers and weak risk appetite.

Forex traders said the rupee continued to face pressure as investors are awaiting cues from the US FED meeting outcome. Besides, global risk sentiments were dampened amid tariff threats by the US President Donald Trump, they said.

At the interbank foreign exchange, the rupee opened at 86.58 then fell further to 86.61 against the American currency, registering a decline of 4 paise over its previous close.

On Tuesday, the rupee depreciated 26 paise to close at 86.57 against the US dollar.

Forex traders said broad dollar demand, foreign fund outflows pressurised the rupee. However, a decline in crude oil prices cushioned the downside.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 107.83, lower by 0.03 per cent.

Brent crude, the global oil benchmark, was quoted 0.15 per cent lower at USD 77.37 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 216.69 points or 0.29 per cent up at 76,118.10 in morning trade, while Nifty was higher by 68.70 points or 0.3 per cent to 23,025.95 .

Foreign Institutional Investors (FIIs) offloaded equities worth ₹4,920.69 crore in the capital markets on net basis on Tuesday, according to exchange data.

Traders further said the Reserve Bank of India’s announcement of the open market operations (OMO) may also support the rupee at lower levels.

As part of its over ₹1.5 lakh crore liquidity injection into the banking system, the Reserve Bank on Tuesday said it will conduct a USD/INR buy-sell swap auction of USD 5 billion (about ₹43,000 crore) on January 31.

The RBI had announced OMO purchase auctions of government bonds aggregating ₹60,000 crore, Variable Rate Repo (VRR) auction of ₹50,000 crore and foreign exchange swap of USD 5 billion.

The decision on liquidity injections comes days ahead of RBI’s next bi-monthly monetary policy in which the Monetary Policy Committee may opt for a reduction in the benchmark lending rate.

Representational image.
| Photo Credit: REUTERS

The rupee stayed almost flat, trading 1 paisa higher at 84.07 against the US dollar in early trade on Wednesday (October 23, 2024) dragged down by strengthening American currency and relentless outflow of foreign funds.

Forex traders said a downward trend in domestic equity markets and elevated level of crude oil prices prevented a recovery in the Indian currency.

At the interbank foreign exchange, the rupee opened 1 paisa higher at 84.07 against the greenback and traded on a flat note in early deals.

On Tuesday, the rupee settled 1 paisa lower at 84.08 against the US dollar.

The local currency has been struggling to recover since October 11, when it closed at its lowest level of 84.10 against the dollar.

According to analysts, the rupee has been under pressure due to the continuous selling of Indian equities by FIIs in pursuit of better gains from the Chinese market.

Also, they said, a surge in the US treasury yields raised concerns that the Federal Reserve may slowdown its rate cut move, steering investors towards safe-haven assets.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.06 per cent to 103.97.

Brent crude, the international benchmark, fell 0.22 per cent to USD 75.87 per barrel in futures trade.

On the domestic equity market front, Sensex declined 96.34 points, or 0.12 per cent, to 80,124.38 points. The Nifty also fell 32.95 points, or 0.13 per cent, to 24,439.15 points. Both the indices tumbled more than 1 per cent on Tuesday.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth ₹3,978.61 crore, according to exchange data.

Representational image.
| Photo Credit: AFP

Rupee traded in a narrow range and appreciated 5 paise to 83.88 against the US dollar in morning trade on Friday (August 23, 2024) supported by easing crude oil prices and fresh foreign fund inflows.

Forex traders said significant correction in oil prices, which is hovering around USD 77 per barrel, is a major positive for the rupee, given India’s substantial oil imports.

At the interbank foreign exchange market, the local unit opened at 83.93 and then gained ground and touched 83.88, registering a rise of 5 paise from its previous close.

On Thursday, the rupee traded in a narrow range and settled lower by 3 paise at 83.93 against the American currency.

“Despite the dollar index reaching a recent low, the Indian rupee remains steadfast, showing little signs of strengthening. This resilience can be attributed to the central bank’s deliberate interventions, aimed at stabilizing the USDINR around the 83.90-95 range,” CR Forex Advisors MD-Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.15 per cent to 101.35 points.

Brent crude, the global oil benchmark, was 0.12 per cent up at USD 77.31 per barrel in futures trade, “In the near term, the rupee is expected to trade within a narrow range, with an upside limit around 83.80 and support around 84.00,” Pabari added.

The domestic equity market witnessed heavy volatility in morning trade, the 30-share BSE Sensex which opened on a positive note was later trading 13.2 points, or 0.02 per cent down, at 81,039.99 points.

The Nifty also witnessed similar movement, it opened on a higher note, but soon pared the gains to trade 8.25 points, or 0.03 per cent lower at 24,803.25 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday as they purchased shares worth Rs 1,371.79 crore, according to exchange data.

On the domestic macroeconomic front, the minutes of the last Monetary Policy Committee (MPC) released by the RBI on Thursday noted that the calibrated increase in policy repo rate by 250 basis points since May 2022 and subsequent change of stance to the withdrawal of accommodation have facilitated gradual disinflation over 2022-23.

According to Reserve Bank Governor Shaktikanta Das, the current policy rate of 6.5 per cent is broadly balanced, and any justification for policy easing at this juncture can be misleading.

The Indian rupee turned flat at 83.94 against the US dollar in early trade on Friday (August 16, 2024) amid concerns over elevated crude oil prices and the outflow of foreign capital from domestic equity markets.

However, a positive sentiment in the domestic as well as global equity markets and a weak American currency supported the rupee, forex traders said.

At the interbank foreign exchange, the rupee opened at 83.93 and slipped further to trade at its previous session’s closing level of 83.94 against the greenback.

On Wednesday (August 14, 2024) the rupee settled 3 paise higher at 83.94 against the US dollar. The forex markets were closed on Thursday on account of the Independence Day.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally lower by 0.01 per cent at 102.80.

Brent crude, the global oil benchmark, declined 0.25 per cent to USD 80.84 per barrel.

On the domestic equity market front, Sensex surged 811.34 points, or 1.03 per cent, to 79,917.22 points. The broader Nifty also climbed 246.20 points, or 1.02 per cent, to 24,389.95 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 2,595.27 crore, according to exchange data.

On the domestic macroeconomic front, wholesale inflation fell to a 3-month low of 2.04 per cent in July on the decline in prices of food items, especially vegetables, government data released on Wednesday showed.

The latest government data released on Wednesday showed India’s exports contracted 1.2 per cent to USD 33.98 billion in July, while the trade deficit widened to USD 23.5 billion.

The rupee depreciated 5 paise to 83.53 against the US dollar in early trade on Wednesday, July 3, 2024, weighed down by the strong American currency and elevated crude oil prices.

Forex traders said the rupee is trading in a narrow range as US dollar buying by oil companies and Foreign Portfolio Investors (FPIs) further dented investor sentiment, while a firm trend in domestic equities supported the rupee at lower levels.

At the interbank foreign exchange market, the rupee opened at 83.51 and lost further ground to trade at 83.53 against the greenback in initial deals, registering a fall of 5 paise from its previous closing level.

On Tuesday, the rupee depreciated 4 paise to settle at 83.48 against the US dollar.

“… Global factors such as the elevated US DXY around 105.50, the depreciation of the Yen and Yuan, and the rise in US bond yields have prevented the rupee from gaining significant strength and moving away from its multi-month low,” CR Forex Advisors MD Amit Pabari said.

Rupee traders are in for a roller-coaster ride, though within a constrained range of 83.20 to 83.70 for the time being, Pabari added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 105.71, lower by 0.01 per cent, following a surge in US treasury yields.

Brent crude futures, the global oil benchmark, advanced 0.55 per cent to USD 86.71 per barrel.

In the domestic equity market, Sensex hit the historic 80,000-mark and Nifty scaled fresh lifetime highs in early trade. The BSE Sensex was later trading 446.5 points, or 0.56 per cent higher at 79,887.95 points. The broader NSE Nifty advanced 132.50 points, or 0.55 per cent, to 24,256.35 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth ₹2,000.12 crore, according to exchange data.