The Indian rupee traded within a narrow range and saw a 3 paise depreciation against the US dollar in early trading on Friday, ahead of the release of the Economic Survey 2024-25 by Finance Minister Nirmala Sitharaman.
According to forex traders, the rupee’s performance is being impacted by sustained foreign fund outflows, a strong US dollar in international markets due to continuous demand from oil importers, and a weak risk appetite. The rupee opened at 86.63 against the dollar and dropped further to 86.65 at the interbank foreign exchange, marking a decline of 3 paise from the previous close of 86.62.
The ongoing challenges faced by the Indian economy will be outlined in the Economic Survey, which will provide an official assessment of the current fiscal year’s performance and identify key issues. Factors contributing to the rupee’s struggle include high foreign fund outflows, expectations of monetary easing by the Reserve Bank of India, and uncertainty surrounding US President Donald Trump’s trade policies.
In addition, the recent 25-basis-point rate cut by the European Central Bank has strengthened the US dollar index, further impacting the rupee’s value. The upcoming Union Budget 2025 is expected to be crucial for the Indian economy, with potential outcomes influencing the flow of foreign institutional investments and the rupee’s stability.
In international markets, the dollar index was up by 0.37% at 108.20, while Brent crude oil prices rose by 0.83% to $77.51 per barrel. On the domestic front, the BSE Sensex was trading higher by 192.97 points, or 0.25%, at 76,952.78, and the Nifty was up by 72.70 points, or 0.31%, at 23,322.20.
Foreign Institutional Investors (FIIs) sold equities worth ₹4,582.95 crore on a net basis on Thursday. The rupee’s fate will depend on the budget’s impact on capital flows and fiscal discipline, as well as global economic developments affecting the currency’s value.
