The rupee strengthened by 3 paise to 88.72 against the US dollar in early trading on Tuesday, supported by a decline in crude oil prices and positive sentiments in domestic equity markets.
However, a slightly stronger US dollar and foreign institutional investor (FII) outflows limited more substantial gains in the local currency, according to forex traders. They noted that the markets are keenly awaiting the Reserve Bank of India’s (RBI) Monetary Policy Committee announcement scheduled for Wednesday.
In the interbank foreign exchange market, the rupee opened at 88.73 against the dollar before rising to 88.72, reflecting an increase of 3 paise from its previous close. On Monday, the rupee had settled lower by 3 paise at 88.75 against the dollar.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, commented, “Foreign portfolio investors continue to sell in the equity markets, which tends to pull the rupee down whenever it appreciates. Additionally, with no new developments regarding the India-US trade treaty, the market is looking forward to the RBI’s policy decision on Wednesday.”
This RBI meeting occurs amid ongoing geopolitical tensions and the US implementing a 50 percent tariff on Indian exports.
The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading at 97.94, up 0.04 percent. Meanwhile, Brent crude, the global oil benchmark, was down 0.79 percent at $67.43 per barrel in futures trading.
Bhansali noted that Brent crude prices fell due to increased supply from Kurdistan to Turkey, alongside OPEC+ preparing for a production increase in November and a potential US government shutdown that could reduce consumption.
In domestic equity markets, there was a notable uptick in early trading, with the Sensex rising by 312.88 points to 80,677.82 and the Nifty increasing by 96.9 points to 24,731.80.
FII data indicated that investors sold equities worth ₹2,831.59 crore on Monday. Furthermore, the US recently announced a 100 percent tariff on branded or patented drugs entering the country from October 1, with exceptions for pharmaceutical companies establishing manufacturing plants in the US. This exemption applies to projects where construction has commenced, including those that are already underway or broken ground.
Published on September 30, 2025.
