The Indian rupee experienced range-bound trading on Friday morning, depreciating by 5 paise to reach 88.76 against the US dollar. Factors such as the strength of the American currency in the global market and a decline in domestic equities negatively affected investor sentiments.
Forex traders noted that the USD/INR pair is currently trading within a narrow range, with pressures from US policies, trade tensions, and broader global uncertainties contributing to market unease. Continuing foreign fund outflows and the ongoing increase in US visa fees further dampened the domestic currency.
In the interbank foreign exchange market, the rupee opened at 88.68 but fell to 88.76 against the US dollar, marking a decline of 5 paise from its previous closing level. Earlier in the week, the rupee had risen by 9 paise from its all-time closing low, ultimately settling at 88.71 against the US dollar on Wednesday.
Trading in equity, forex, bullion, and commodity markets was halted on Thursday due to the observance of Gandhi Jayanti and Dussehra. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, suggested that exporters might consider various options strategies to manage volatility in the market. He attributed rupee weakness to capital outflows, high gold imports, and a global risk-averse sentiment, emphasizing that these factors have contributed to a decline in the rupee of over 5 percent over the past year.
The dollar index, which measures the US dollar’s strength against a basket of six currencies, rose by 0.04 percent to 97.88. Meanwhile, Brent crude, the global oil benchmark, traded 0.55 percent higher at $64.46 per barrel in futures trading.
On the domestic equity front, the Sensex fell by 299.17 points to 80,684.14 in opening trades, while the Nifty index saw a drop of 76.75 points, settling at 24,759.55. Foreign Institutional Investors sold equities worth ₹1,605.20 crore on a net basis on Wednesday, according to exchange data.
Moreover, the Reserve Bank of India (RBI) kept its key interest rates unchanged on Wednesday, indicating a wait for additional clarity regarding the impact of US tariffs and the effects of earlier rate cuts and recent tax reductions. RBI Governor Sanjay Malhotra hinted at the possibility of easing measures in the coming months to support the economy against potential challenges arising from US tariffs.
Published on October 3, 2025.
