The Indian rupee weakened by 5 paise to settle at ₹88.75 against the U.S. dollar in early trade on Thursday, amid persistent foreign fund outflows and a firm American currency in global markets. The decline reflects cautious investor sentiment ahead of key macroeconomic data releases and global monetary policy cues.
At the interbank foreign exchange market, the domestic currency opened at ₹88.70 and slipped to ₹88.75, registering a 5 paise drop from its previous close of ₹88.70. Traders attributed the movement to increased demand for the dollar from importers and subdued risk appetite among investors.
Market analysts noted that the rupee’s depreciation was also influenced by a stronger dollar index, which tracks the greenback against a basket of major currencies. The index remained firm following hawkish commentary from the U.S. Federal Reserve, which signaled a data-dependent approach to future rate decisions.
Meanwhile, crude oil prices hovered near $82 per barrel, adding pressure on India’s import bill and weighing on the rupee. Domestic equity markets opened mixed, with the BSE Sensex and NSE Nifty showing marginal gains, offering limited support to the local currency.
Forex dealers expect the rupee to trade in a narrow range in the near term, with potential volatility driven by inflation data, global bond yields, and geopolitical developments. The Reserve Bank of India (RBI) is closely monitoring currency movements but has not intervened directly in recent sessions.
