The Indian rupee recovered from its historic low, gaining 6 paise to reach 88.70 against the US dollar in early trading on Friday. This rebound occurred amid a weakening dollar and expectations of progress in the India-US trade negotiations.
Despite this uptick, outflows from Foreign Institutional Investors (FIIs) and rising international crude oil prices tempered the rupee’s gains, forex traders noted. The rupee commenced trading at 88.72 before climbing to 88.70, marking a 6 paise increase from its previous close.
On Thursday, the rupee had declined by 1 paisa to settle at a record low of 88.76 against the dollar. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, emphasized that markets are anticipating action from the Reserve Bank of India (RBI) on October 1, when the Monetary Policy Committee (MPC) will announce its interest rate decision. He described the overall market outlook as cautious, heavily influenced by foreign fund flows, global risk factors, and the resolution of policy uncertainties between India and the USA.
A diplomatic team from India recently returned from the US following trade talks in New York. Commerce and Industry Minister Piyush Goyal led the delegation, which held discussions focused on the proposed trade agreement over several days starting on Monday. These discussions covered a range of trade and non-trade issues.
Meanwhile, the dollar index, which reflects the dollar’s strength relative to six major currencies, was 0.17% lower at 98.38. In the oil market, Brent crude, the global benchmark, saw a 0.22% increase, trading at $69.57 per barrel in futures.
Bhansali attributed the rise in Brent crude prices to various factors, including Russia’s extended fuel restrictions, decreasing US crude inventories, and heightened geopolitical risks stemming from Ukraine’s actions against Russian infrastructure, along with NATO’s vigorous response.
On the domestic equity front, the Sensex fell by 329.66 points to 80,830.02 in early trading, while the Nifty dropped 105.7 points to 24,785.15. On Thursday, Foreign Institutional Investors sold equities worth ₹4,995.42 crore, according to data from the exchange.
Published on September 26, 2025.
