Rupee Depreciates 25 Paise Against The Dollar

Mumbai, June 4: The Indian rupee slipped 25 paise to trade at 85.86 against the US dollar in early market action on Wednesday. One of the main reasons for the fall is the outflows by Foreign Institutional Investors (FIIs) who are selling Indian securities to invest in foreign markets amid a global market rally.

Asian Markets, such as Japan’s Nikkei 225 index, South Korea’s KOSPI, and Shanghai’s SSE Composite, were trading higher than their previous close, while U.S. markets ended positively due to strong job openings data that helped counter concerns over U.S. trade policies. This global rally has resulted in FIIs investing in global markets by withdrawing their money from Indian securities, thereby weakening the Indian Rupee.

Foreign Institutional Investors (FIIs) remained net sellers in Indian equities, pulling out Rs 2,853.83 crore on Tuesday, adding pressure on the local currency. This marks the second consecutive day of depreciation, following a 22-paise fall on Tuesday.

Rupee’s Early Market Performance

At the interbank foreign exchange, the rupee opened at 85.69 and continued to weaken, reaching 85.86 against the greenback in morning trade. However, the domestic currency found some support from the equity markets, a weakening US dollar, and moderating crude oil prices.

• Dollar Index: Down 0.05% at 99.18
• Brent Crude: Dropped 0.32% to USD 65.42 per barrel

Indian stock markets offered some relief to the rupee:

What’s Ahead For The Indian Rupee?

The rupee has largely hovered between 85 and 86 in recent weeks, with RBI intervention around the 85.70–85.75 range helping to contain volatility. While global cues and falling crude prices lent support, continued capital outflows and pre-policy uncertainty kept the rupee under pressure.

The currency’s near-term movement will likely depend on the RBI’s policy stance, global risk sentiment, and foreign fund flows. Market participants are now closely watching the RBI Monetary Policy Committee (MPC), which began its three-day meeting today. The outcome, expected on Friday, could include a 25-basis-point cut in the repo rate, bringing it down to 5.75%, according to market expectations.

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