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| Photo Credit: Reuters

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| Photo Credit: AP

According to forex experts, amid rising tensions with the U.S. and economic concerns, the rupee remained vulnerable and could see further downside as uncertainty continues to mount. File
| Photo Credit: The Hindu

 At the interbank foreign exchange market, the rupee opened on a negative note and touched an early low of 87.15 against the American currency on July 30, 025, registering a fall of 24 paise over its previous close. File
| Photo Credit: REUTERS

The rupee recovered 16 paise from all-time low closing level to 87.43 against the US dollar in early trade on Friday (Febraury 7, 2025) ahead of the Reserve Bank of India’s monetary policy announcement.

Forex traders said there is an overall negative bias in the rupee as market participants are projecting RBI to cut rates by 25 bps.

While a rate cut could help ease some of the pressure by improving liquidity and attracting foreign investments, it would also lead to an increase in rupee supply, which could further weaken the currency and exacerbate depreciation pressures, they said.

At the interbank foreign exchange, the rupee opened at 87.57 against the greenback, and touched 87.43 against the greenback in initial trade, registering a rise of 16 paise from its previous close.

On Thursday, the rupee plunged 16 paise to close at an all-time low of 87.59 against the US dollar.

“As long as the liquidity deficit persists, the rupee will remain under pressure. Additionally, the CRR cut is further weighing on the rupee.

“With current headwinds surpassing tailwinds and compounded by the RBI’s rate cut expectations, the rupee is expected to trade at elevated levels between 87.20 and 87.70, with 87.20 acting as a support level,” CR Forex Advisors MD Amit Pabari said.

The Monetary Policy Committee (MPC) of the Reserve bank of India (RBI) began its three-day meeting on Wednesday. The MPC will announce its policy decision at 1000 hrs.

New RBI Governor Sanjay Malhotra, who is chairing his first Monetary Policy Committee (MPC) meeting, will announce the decision of the six-member panel on Friday morning, amid widespread expectations of 25 basis points reduction in interest rate after a gap of nearly five years.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03 per cent higher at 107.72.

Brent crude, the global oil benchmark, rose 0.50 per cent to USD 74.66 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 39.26 points, or 0.05 per cent, lower at 78,018.90 points, while the Nifty was down 8.25 points, or 0.03 per cent, at 23,595.10 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 3,549.95 crore in the capital markets on a net basis on Thursday, according to exchange data.

The rupee traded in a narrow range and depreciated 9 paise to 87.16 against the US dollar in early trade on Wednesday (February 5, 2025) , as global trade war has fuelled risk aversion among investors.

Forex traders said the rupee is trading with a negative bias over global trade war as market participants mulled the impact of tariffs being imposed by the United States and China.

However, any central bank intervention may support the rupee, they added.

At the interbank foreign exchange, the rupee opened at 87.13 then fell further to 87.16 against the American currency, registering a decline of 9 paise over its previous close.

On Tuesday, the rupee recovered 4 paise from its all-time low level to close at 87.07 against US dollar.

“For now the trade war seems to have slowed down as we await comments from Donald Trump on European exports and also on currencies. Meanwhile, the rupee remains range bound within a range of 86.90/87.25,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Mr. Trump is pressing ahead with a 10 per cent tariff on US companies importing things from China. On Tuesday, China retaliated by announcing its own tariffs on some US products and an antitrust investigation into Google.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 107.89, lower by 0.06 per cent.

Brent crude, the global oil benchmark, was quoted 0.50 per cent lower at USD 75.82 per barrel in futures trade.

Investors may remain cautious ahead of the Reserve Bank of India’s monetary policy meeting this week, traders said.

The Monetary Policy Committee (MPC) of the Reserve bank of India (RBI) will begin its three-day meeting on February 5. The MPC will announce its policy decisions on February 7.

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.

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.

The rupee depreciated 22 paise to 86.44 against the US dollar in early trade on Monday (January 27, 2025), weighed down by the strength of the American currency in the overseas market and a muted trend in domestic equities.

Forex traders said the Indian rupee gained on Friday (January 24, 2025) but opened on a lower note on Monday (January 27, 2025)as U.S. President Donald Trump’s tariffs uncertainty gained.

At the interbank foreign exchange, the rupee opened at 86.35 then fell further to 86.44 against the American currency, registering a decline of 22 paise over its previous close.

On Friday, the rupee appreciated 22 paise to close at 86.22 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 107.67, higher by 0.21 per cent, after Trump threatened to apply 25 per cent Tariffs on Colombia after the plane carrying migrants was returned by the country.

Meanwhile, the US has paused sanctions and tariffs on Colombia after it agreed to accept all the terms of President Donald Trump, including accepting flights of deported migrants from America, the White House said.

The announcement comes after Mr. Trump and Colombian President Gustavo Petro threatened increased retaliatory tariffs after Petro turned away two US military aircraft full of detained Colombian migrants.

The White House late Sunday night said Colombia has agreed to all of President Trump’s terms.

“The Government of Colombia has agreed to all of President Trump’s terms, including the unrestricted acceptance of all illegal aliens from Colombia returned from the United States, including on US military aircraft, without limitation or delay,” White House Press Secretary Karolina Leavitte said.

Brent crude, the global oil benchmark, was quoted 0.57 per cent lower at USD 78.05 per barrel in futures trade.

“Brent oil slipped to USD 76.85 per barrel as Trump repeated his call for OPEC to reduce prices following the announcement of wide-ranging measures to boost US oil output in his first week of office,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Forex traders said the rupee continued to face pressure due to sustained foreign fund outflows.

Moreover, the upcoming Union Budget will play a crucial role in shaping market sentiment and the rupee’s trajectory, as expectations are high for favourable measures aimed at rekindling foreign investments.

In the domestic equity market, the 30-share BSE Sensex was trading 296.31 points or 0.39 per cent down at 75,894.15 in morning trade, while Nifty was lower by 90.50 points or 0.39 per cent to 23,001.70.

The rupee declined 5 paise to 86.40 against the US dollar in early trade on Thursday (January 23, 2025) amid a strengthening greenback.

While a drop in crude oil rates and an upward trend in the domestic equity markets prevented further decline in the local currency, forex traders expected it to remain volatile throughout the day and trade in a wide range of 86.20-86.60.

At the interbank foreign exchange, the rupee opened at 86.46, down 11 paise from its previous close, and dropped further to 86.52.

However, it recovered some of its losses as the equity markets showed an upward trend to rise to 86.40, lower by 5 paise from Wednesday’s close.

The domestic currency had appreciated 23 paise to close at 86.35 against the US dollar on Wednesday (January 22, 2024).

“Exporters may continue to wait with a stop loss at 86.25 since the rupee continues to remain in a weakening mode due to US dollar demand,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

“The rupee, which gained yesterday (Wednesday) due to inflows from Vedanta and bond market inflows, opened weaker this morning. The wide range for the day is expected to be 86.20-60,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.08 per cent higher at 108.25.

Brent crude, the global oil benchmark, was down 0.34 per cent to USD 78.73 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex rose 151.34 points, or 0.20 per cent, to 76,556.33, while the Nifty rose 51.95 points, or 0.22 per cent, to 23,207.30.

Foreign Institutional Investors (FIIs) remained net sellers in the capital markets on Wednesday, offloading shares worth Rs 4,026.25 crore, according to exchange data.