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Rupee depreciated 14 paise to close near its all-time low against the U.S. dollar. File

 On Tuesday (December 30), the rupee rose 23 paise to close at 89.75 against the greenback.  
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The rupee depreciated 45 paise to hit a record low of 87.95 against the U.S. dollar in early trade on Monday (February 10, 2025) weighed down by the strength of the American currency in the overseas market and a negative trend in domestic equities.

Forex traders said the dollar index was quoted at 108 gained after President Donald Trump said he was said to impose new 25% tariffs on all steel and aluminium imports.

The move has added jitters over the global trade war with China’s reciprocal duties coming into effect, they said.

At the interbank foreign exchange, the rupee opened at 87.94 and slipped further to all-time low of 87.95 against the greenback in initial deals, a fall of 45 paise from its previous close.

On Friday, the rupee recovered 9 paise from all-time low level to close at 87.50 against the U.S. dollar.

Rupee was expected to open weaker after RBI cut rates on Friday by 25 bps and was expected to cut another 25 bps in April to promote growth as inflation seemed to be showing a downward trend as per the Reserve Bank, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

The target of 88 is likely to be achieved in February itself as quick upside with RBI allowing the weakness to creep in has taken the pair to its all time highest level.

“The rupee is expected to be within a range of 87.70/88.10. Importers are expected to buy the dips, while exporters need to wait and watch the movement,” Mr. Bhansali added.

Reserve Bank Governor Sanjay Malhotra on Saturday said that the market forces decide the value of rupee with respect to the U.S. dollar and the central bank is not worried about day-to-day movement of the currency value.

Addressing the media after the meeting of Finance Minister Nirmala Sitharaman with the Reserve Bank board, Mr. Malhotra said that the central bank focuses on the value of the rupee in the medium to long term.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22% higher at 108.28.

Brent crude, the global oil benchmark, rose 0.63% to $75.13 per barrel in futures trade.

Forex traders said the Indian rupee is trading with a negative bias as foreign banks went on a dollar-buying spree and importers scrambled to secure dollars, as they feared further depreciation amidst global uncertainty.

In the domestic equity market, the 30-share BSE Sensex was trading 426.34 points, or 0.55%, lower at 77,433.85 points, while the Nifty was down 134.65 points, or 0.57%, at 23,425.30 points.

Foreign institutional investors (FIIs) offloaded equities worth ₹470.39 crore in the capital markets on a net basis on Friday, according to exchange data.

Meanwhile, India’s forex reserves rose $1.05 billion to $630.607 billion for the week ended January 31, the RBI said on Friday.

In the previous reporting week, the overall reserves had increased by $5.574 billion to $629.557 billion.

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The rupee depreciated 14 paise to hit record low of 87.57 against the U.S. dollar in early trade on Thursday (February 6, 2025) weighed down by anticipation of an RBI rate cut and weak economic data.

Forex traders said the Indian rupee opened on a weak note and made a fresh record low of 87.57 as market participants anticipated that the Reserve Bank of India (RBI) may slash interest rates on February 7, 2025.

Moreover, the rupee continued to face pressure due to sustained foreign fund outflows and a negative trend in domestic equities amid weak risk appetite, they added.

At the interbank foreign exchange, the rupee opened at 87.54 and slipped further to all-time low of 87.57 against the greenback in initial deals, a fall of 14 paise from its previous close.

On Wednesday (February 5, 2025), the rupee plunged 36 paise to close at an all-time low of 87.43 against the U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.11% higher at 107.69.

Brent crude, the global oil benchmark, rose 0.13 per cent to $74.71 per barrel in futures trade.

Forex traders said the Indian rupee is trading with a negative bias as foreign banks went on a dollar-buying spree and importers scrambled to secure dollars, as they feared further depreciation amidst global uncertainty.

Additionally weak PMI data signalled a slowdown in economic activity.

India’s services sector activity expanded at the slowest pace in over two years in January amid softer increases in sales and output. The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 59.3 in December to 56.5 in January — its lowest level since November 2022.

The Indian rupee made a record low as the market anticipated that RBI may slash interest rates on February 7, 2025. Widespread stoploss were triggered further exacerbating the currency weakness, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

“The rupee’s slide invoked investor concerns as significant dollar buying by foreign banks and oil companies contributed to the weakness,” Mr. Bhansali said, adding that the rupee is expected to be in the range of 87.30/60 with a close watch on the RBI.

The Monetary Policy Committee (MPC) of the Reserve bank of India (RBI) began its three-day meeting on Wednesday (February 5, 2025). The MPC will announce its policy decisions on February 7.

In the domestic equity market, the 30-share BSE Sensex was trading 159.80 points, or 0.20%, lower at 78,111.48 points, while the Nifty was down 54.75 points, or 0.23%, at 23,641.55 points.

Foreign institutional investors (FIIs) offloaded equities worth ₹1,682.83 crore in the capital markets on a net basis on Wednesday, according to exchange data.

The rupee pared its early gains to close lower by 1 paisa at 83.53 (provisional) against the US currency on Monday (September 23, 2024), snapping its six-day gaining streak due to a strengthening dollar in overseas markets and an uptick in crude oil prices.
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The rupee pared its early gains to close lower by 1 paisa at 83.53 (provisional) against the US currency on Monday (September 23, 2024), snapping its six-day gaining streak due to a strengthening dollar in overseas markets and an uptick in crude oil prices.

A decline in India’s Services PMI also affected the investor sentiment while gains in domestic equity markets capped losses in the local unit, forex traders said.

Earlier in the day, the rupee opened at 83.44 against the greenback, 8 paise higher than its previous close. However, it gave up gains during the day to finally settle at 83.53 (provisional) against the US dollar, 1 paisa lower than its previous close.

The rupee had closed at 83.52 on Friday.

“We expect the rupee to trade with a slight positive bias on positive global equities and fresh FII inflows. However, a recovery in the greenback and elevated crude oil prices may cap sharp upside,” Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

A decline in India’s Services PMI to 58.9 in August from 60.9 in July also contributed to the drop in the rupee, he said.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.34 per cent at 101.06.

In the domestic equity markets, Sensex jumped 384.30 points to settle at an all-time high of 84,928.61 while Nifty climbed 148.10 points to a record peak of 25,939.05.

Brent crude, the international benchmark, advanced 0.26 per cent to USD 74.68 per barrel in futures trade.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, as they purchased shares worth Rs 14,064.05 crore, according to exchange data.

“Investors may watch out for US GDP, consumer confidence and core PCE price index data from US this week. We expect USDINR to trade in the range of 83.35-83.75,” Choudhary added.

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The rupee pared its initial losses and settled for the day on an almost flat note at 83.50 (provisional) against the U.S. dollar on July 4, resisting pressure from elevated crude oil prices.

Forex traders said a positive trend in domestic equities, wherein benchmark indices touched all-time high levels, and significant foreign fund inflows supported the rupee and restricted the fall.

At the interbank foreign exchange market, the local unit opened at 83.52 and hit the intraday high of 83.48 and a low of 83.56 against the American currency during the session.

It finally settled at 83.50 (provisional) against the dollar, 1 paisa lower than its previous close.

On Wednesday, the rupee settled 1 paisa lower at 83.49 against the U.S. dollar.

“We expect the rupee to trade with a slight positive bias on softness in the US dollar amid weak economic data and rise in risk appetite in global markets,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

“However, elevated crude oil prices may limit the gains. Investors may remain cautious ahead of the U.S. non-farm payrolls report tomorrow,” Mr. Choudhary said, adding that $-₹ spot price is expected to trade in a range of ₹83.20 to ₹83.80.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.15% lower at 105.24.

Brent crude futures, the global oil benchmark, were trading 0.47% lower at $86.93 per barrel.

In the domestic equity market, Sensex breached the historic 80,000-mark and Nifty scaled a fresh lifetime high. The 30-share BSE Sensex ended the day 62.87 points, or 0.08%, up at its all-time high of 80,049.67 points. The broader NSE Nifty settled 15.65 points, or 0.06%, higher at a fresh peak of 24,302.15 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, as they purchased shares worth ₹5,483.63 crore, according to exchange data.

Meanwhile, according to an official of S&P Global Ratings, a sovereign rating upgrade for India in the next 24 months is possible if the central government is able to prudently manage its finances and bring down the fiscal deficit to 4% of GDP.

S&P Global Ratings Director, Sovereign Ratings, YeeFarn Phua, said the trigger for an upgrade would be the government (Centre + states) deficit falling below 7 per cent of the GDP, and a lot of this would have to be driven by the central government.

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The rupee appreciated by 12 paise to 83.17 against the U.S. dollar on May 24, tracking a bullish trend in domestic equities, wherein benchmark indices scaled new peaks.

Forex traders attributed the rally to ₹2.11 lakh crore record dividend by the RBI to the government for the fiscal ended March 31. It was more than double the budgeted expectation, helping shore up revenue ahead of a new government taking office.

At the interbank foreign exchange market, the local unit opened at 83.26 and gained further ground to trade at 83.17 against the greenback, registering a gain of 12 paise from its previous closing level.

The forex market was closed on Thursday on account of ‘Buddha Purnima’.

On Wednesday, the rupee appreciated by 2 paise to settle at 83.29 against the U.S. dollar.

After a trading holiday on Thursday, the Indian rupee was on a strong footing following a big transfer of ₹2.11 lakh crore in the form of dividend from the Reserve Bank of India (RBI) to the Union government, which would improve not only government finances but also allow leverage to spend more on infrastructure, said Anil Kumar Bhansali Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 105.11, higher by 0.01%.

Brent crude futures, the global oil benchmark, advanced 0.05% to $81.40 per barrel.

“The overall outlook for the rupee appears strongly positive, with the Nifty 50 reaching an all-time high. These factors indicate that India remains a focal point for investors, with potential for the rupee to appreciate.

“In the short term, the rupee is expected to approach levels of 83.00 to 83.10, while the medium-term target is projected to range between 82.80 and 82.50,” CR Forex Advisors MD Amit Pabari said.

On the domestic equity market, both the benchmark indices scaled new peaks. The 30-share BSE Sensex was trading 51.21 points, or 0.07% higher at 75,469.25 points. The broader NSE Nifty breached the 23,000 level in initial trade.

Moreover, the market capitalisation of listed companies on the NSE surpassed $5 trillion (Rs 416.57 trillion) on Thursday on a day when the Nifty 50 index touched an all-time high of 22,993.60.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday, as they purchased shares worth ₹Rs 4,670.95 crore, according to exchange data.