Rupee weakens, settles at 86.52 per dollar.
Foreign institutional investors (FIIs) continued their selling streak in the Indian equity markets, offloading shares worth ₹1,979.96 crore on a net basis this Friday, according to data released by the stock exchanges. This move reflects cautious sentiment among global investors amid rising uncertainties in the financial markets. The consistent outflows by FIIs have put pressure on market indices, contributing to recent volatility. Market analysts suggest that macroeconomic concerns and global cues may be influencing these foreign investment decisions.
Rupee Falls 12 Paise to 86.52 Against US Dollar Amid Crude Surge, Weak Markets
According to forex traders, the decline in the rupee was also influenced by a stronger US dollar in overseas markets and sustained outflows of foreign institutional investment.
During the trading session, it hit a low of 86.63 and a high of 86.47. Eventually, it settled at 86.52, marking a 12 paise drop from its previous close of 86.40.
On Thursday, the domestic currency had shown early signs of recovery but ended the day with a marginal gain of just 1 paisa, closing at 86.40 per US dollar.
Anuj Choudhary, a research analyst at Mirae Asset’s Sharekhan, explained that the weakness in the rupee was largely due to the rising crude oil prices and subdued performance in domestic equity markets. Both these factors contributed to the continuing withdrawal of foreign institutional investors (FIIs), further amplifying the pressure on the local currency.
Choudhary further noted that the rupee could remain under slight negative pressure in the coming sessions, with several global and regional uncertainties looming.
“Traders may closely watch the upcoming durable goods orders data from the US for short-term cues,” he said. “Additionally, markets are expected to remain cautious in anticipation of key monetary policy announcements from the US Federal Reserve and the Bank of Japan, both scheduled next week.”
The analyst predicted that the USD-INR spot rate may hover within a range of ₹86.30 to ₹86.90 in the near term, depending on evolving macroeconomic indicators and global cues.
Meanwhile, the US dollar continued to gain strength globally. Analysts attributed the dollar’s rise to robust employment data coming out of the United States, which has buoyed investor confidence in the American economy.
Market participants believe the rise was supported by optimism around developing trade agreements and tighter global supply conditions, both of which have propped up oil prices in recent sessions.
Forex dealers also pointed to uncertainty surrounding the India-US trade negotiations as a source of persistent volatility in the currency market. Delays and unclear communication regarding the terms of the deal have unsettled traders, who are looking for clarity in order to make informed decisions.
In related news, the Reserve Bank of India (RBI) released data on Friday indicating a decline in the country’s foreign exchange reserves. This dip, while not alarming in itself, adds to the broader concerns about external account vulnerabilities amid rising global headwinds.
Taken together, the combination of rising oil prices, foreign fund outflows, geopolitical tensions, and policy uncertainty has created a cautious atmosphere in the forex market. Analysts suggest that while the rupee is not facing a crisis, its short-term trajectory will likely remain under pressure unless supported by strong inflows or decisive policy support.
As the world awaits further developments on interest rates and trade talks, traders and investors alike will be keeping a close watch on every move—both global and domestic—that could impact the currency’s movement in the days to come.