The Indian rupee depreciated by 48 paise, closing at a provisional rate of 88.70 against the US dollar on Thursday. This decline was attributed to a robust US dollar, weak performance in domestic markets, and a hawkish stance from the US Federal Reserve.
Forex traders noted that while the Fed reduced interest rates by 25 basis points during its Federal Open Market Committee (FOMC) meeting, Chairman Jerome Powell’s comments tempered expectations for further rate cuts in December.
Additionally, the month-end demand for dollars from Oil Marketing Companies (OMCs) and foreign fund outflows are expected to pressure the rupee.
In the interbank foreign exchange market, the rupee opened at 88.37 and reached an intra-day low of 88.74 before settling at 88.70, marking a decline of 48 paise from the previous close. On Wednesday, the rupee had appreciated by seven paise, closing at 88.22.
Anuj Choudhary, Research Analyst for Currency and Commodities at Mirae Asset ShareKhan, indicated that the rupee is likely to exhibit a slight negative bias due to the strong US dollar, weak domestic markets, and persistence of a hawkish Fed. Choudhary highlighted month-end dollar demand from OMCs as another factor contributing to the rupee’s weakness.
Despite the Fed’s rate cut, Powell indicated that a rate decrease in December is not guaranteed due to inflation remaining above target and uncertainties in the labor market. Following these remarks, market anticipations of a December rate cut diminished, leading to increased US Treasury yields and a stronger dollar.
Choudhary also noted that a decline in crude oil prices could lend support to the rupee at lower levels, estimating that the USDINR spot price could trade within a range of 88.45 to 89.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, fell by 0.09% to 99.12. Brent crude, the global oil benchmark, decreased by 0.65% to $64.50 per barrel in futures trading.
On the equity front, the domestic market faced significant losses, with the Sensex dropping 592.67 points to close at 84,404.46, and the Nifty declining by 176.05 points to settle at 25,877.85. Additionally, foreign institutional investors sold equities worth ₹2,540.16 crore on Wednesday, according to exchange data.
Published on October 30, 2025
