The Indian rupee saw a modest appreciation against the U.S. dollar on Monday, October 13, 2025, closing up five paise at a provisional 88.67. This upward momentum was largely attributed to what appeared to be intervention by the Reserve Bank of India (RBI) and a fresh wave of foreign capital entering the market.
However, the domestic currency’s ascent wasn’t entirely smooth. Forex traders noted some headwinds arising from renewed trade dispute tensions between the United States and China, which fostered a cautious, ‘risk-off’ sentiment across global markets.
During Monday’s interbank foreign exchange session, the rupee commenced trading at 88.75. It then navigated a range between 88.57 and 88.79 before ultimately settling at 88.67, confirming its five-paise gain from the previous close. This followed a seven-paise appreciation recorded on Friday, October 10, when it closed at 88.72 against the U.S. dollar.
The global economic backdrop remains complex. The U.S. recently escalated its stance against China, threatening an additional 100% in tariffs, a move that came after Beijing imposed controls on rare earth exports last week. Despite these international trade frictions, the USD/INR pair found support. Traders pointed to a growing sense of optimism surrounding ongoing trade discussions between India and the U.S., alongside the potential for further intervention by the RBI to bolster the rupee.
Anuj Choudhary, a research analyst in currency and commodities at Mirae Asset ShareKhan, offered his perspective: "A potential U.S. government shutdown and increasing likelihood of a U.S. Federal Reserve rate cut could further strengthen the domestic currency. Nevertheless, the prevailing risk aversion in global markets, driven by the escalating U.S.-Sino tariff war, might limit significant upward movements. Traders will also be closely watching India’s upcoming Consumer Price Index (CPI) data for further clues."
Positive market sentiment also gained traction from reports indicating that a high-level Indian delegation is scheduled to visit the U.S. this week for trade talks. These discussions are expected to build on recent progress towards a comprehensive bilateral trade agreement. Last month, Commerce and Industry Minister Piyush Goyal led a delegation to New York, where constructive meetings were held, reaffirming both nations’ commitment to an early and mutually beneficial trade deal.
Globally, the dollar index, which measures the U.S. dollar’s value against a basket of six major currencies, climbed 0.13% to 99.10. This rise reflects continued safe-haven demand for the dollar amidst uncertainty. Meanwhile, Brent crude, the international oil benchmark, saw a 1.90% increase, trading at $63.91 per barrel in futures.
Domestically, Indian equity markets experienced a downturn. The Sensex shed 173.77 points, closing at 82,327.05, while the Nifty slipped 58 points to end the day at 25,227.35. Foreign Institutional Investors (FIIs) remained buyers, purchasing equities worth ₹459.20 crore on Friday, according to exchange data. However, India’s forex reserves saw a slight dip, decreasing by $276 million to $699.96 billion during the week ending October 3, following a more substantial drop of $2.334 billion to $700.236 billion in the preceding week, as per RBI figures.