Rupee Closes Lower at 85.73 Against US Dollar Amid Weak Equities, Oil Price Rebound

Mumbai, June 30 — The Indian rupee ended Monday’s session on a weak note, sliding 23 paise to close at 85.73 against the US dollar, reversing early gains amid weak domestic equities and a rebound in global crude oil prices.

Rupee Volatility Despite Positive Opening

The rupee opened strong at 85.48, buoyed by improved global risk sentiment. During intraday trade, it touched a high of 85.44 and a low of 85.77, before settling at 85.73, down from Friday’s close of 85.50.

According to forex analysts, the initial uptick was undercut by a negative trend in domestic equity markets and renewed month-end dollar demand, weighing on the currency.

Crude Oil Recovery and Dollar Dynamics

A bounce back in crude oil prices added pressure to the local unit. Brent crude futures slipped marginally by 0.28% to USD 67.58 per barrel, but the recovery from prior lows influenced forex movements.

Meanwhile, the US dollar index fell by 0.26% to 97.14, as better-than-expected US inflation data eased pressure on global currencies. The weaker greenback limited a sharper fall in the rupee.

Equities Extend Losses, FIIs Remain Buyers

On the equity front, both major indices declined:

• BSE Sensex dropped 452.44 points or 0.54% to end at 83,606.46
• Nifty 50 fell 120.75 points or 0.47% to 25,517.05

Despite the downtrend, foreign institutional investors (FIIs) remained net buyers, investing ₹1,397.02 crore on Friday.

Forex Reserves Slip From Record Highs

India’s forex reserves declined by USD 1.01 billion to USD 697.93 billion for the week ended June 20, as per the Reserve Bank of India. This follows a USD 2.29 billion increase in the prior week. Notably, forex reserves had reached an all-time high of USD 704.88 billion in September 2024.

Outlook: Rangebound Trade Ahead

Analysts expect the USDINR pair to trade between 85.30 and 85.85, with global risk sentiment and oil prices being key drivers. The weakness in the dollar may support the rupee in the short term, but volatility is likely to persist due to external macroeconomic factors and end-of-quarter flows.

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