The Indian rupee staged a notable comeback on Friday, closing 4 paise stronger at 88.72 against the U.S. dollar. This positive movement followed a period where the rupee had touched an all-time low. The resurgence was largely attributed to a weakened greenback in international markets and a significant dip in global crude oil prices, offering some much-needed relief.
Despite this gain, the rupee’s upward trajectory was somewhat limited by persistent outflows of foreign capital and a cautious, risk-off sentiment prevailing in the domestic stock market. However, growing optimism for a successful outcome in ongoing trade negotiations between India and the U.S. provided crucial underlying support for the local currency, as noted by foreign exchange experts.
Trading commenced at 88.72 at the interbank foreign exchange, with the rupee navigating a tight range between 88.67 and 88.73 before ultimately settling at 88.72. This marked a 4-paise improvement from its prior closing value.
Just a day earlier, on Thursday, the rupee had dipped 1 paisa, setting a new lifetime low of 88.76 against the American currency.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, commented on the situation, stating, “The Reserve Bank of India appeared to intervene significantly in the morning, which helped the rupee open at 88.68. Tariffs have been a major factor behind the consistent decline in indices and the rupee, especially with former President Trump’s imposition of 100% tariffs on pharmaceuticals, furniture, and trucks.”
Adding to the economic backdrop, India and the U.S. have confirmed their commitment to ongoing discussions aimed at swiftly concluding a mutually beneficial trade agreement, as reported by the Commerce Ministry.
Commerce and Industry Minister Piyush Goyal led a delegation to the U.S. earlier in the week for these critical three-day trade talks.
Globally, the dollar index, which measures the U.S. dollar’s strength against a basket of six major currencies, showed a slight decline, trading 0.19% lower at 98.37.
Meanwhile, Brent crude, a key global oil benchmark, saw its futures trade 0.39% higher, settling at $69.15 per barrel.
On the domestic stock market, the Sensex experienced a significant fall, dropping 733.22 points to close at 80,426.46. The Nifty also saw a decline, down 236.15 points to finish at 24,654.70.
Foreign Institutional Investors continued their trend of offloading equities, selling shares worth ₹4,995.42 crore on Thursday, according to available exchange data. This outflow indicates ongoing foreign investor caution within the Indian market.