The rupee started to gain momentum but later dropped 5 paise to 87.11 against the US dollar in early trade on Thursday. Despite a lower American currency and crude oil prices, the volatile equity markets and foreign funds outflow impacted sentiment. The local currency initially found support from the US decision to delay higher tariffs on Canada and Mexico, as well as the RBI’s injection of ₹1.9 lakh crore liquidity into the banking system. However, the fluctuating equity markets caused the rupee to fall back into negative territory.
Opening stronger at 86.96, the rupee went up to 86.88 before settling at 87.11 against the greenback, registering a loss of 5 paise from its previous close. The dollar index was slightly higher at 104.30, while Brent crude was up by 0.58% at $69.70 per barrel in futures trade.
In the domestic equity market, the BSE Sensex was down 20.53 points at 73,709.70 points, and the Nifty was lower by 10.75 points at 22,326.55 points. Foreign institutional investors offloaded equities worth ₹2,895.04 crore on a net basis on Wednesday.
The RBI announced open market purchases of government securities and USD/INR swaps totaling about ₹1.9 lakh crore during the month. The central bank had previously conducted a US dollar-rupee swap worth $10 billion to inject long-term liquidity into the system.
India’s services sector activity saw significant growth in February, driven by improving domestic and international demand. The HSBC India Services PMI Business Activity Index rose from January’s 26-month low of 56.5 to 59.0 in February, indicating a sharp pace of expansion.
US President Trump granted a one-month exemption on new tariffs on imports from Mexico and Canada for US automakers after concerns that the trade war could harm domestic manufacturing. The pause followed discussions with leaders of Ford, General Motors, and Stellantis.
