Rupee Depreciates by 7 Paisa Against the Dollar

The Indian rupee depreciated by 7 paise to 85.45 against the US dollar in early trade on Thursday, pressured by a strengthening American currency and weak domestic industrial data.

Rupee opened at 85.56 at the interbank foreign exchange and later recovered marginally to trade at 85.45, marking a 7-paise decline from its previous close of 85.38. On Wednesday, the local unit had gained 2 paise.

Dollar Strength and Global Developments Weigh on Rupee

The US dollar index rose by 0.40% to 100.18. This reflects broad strength in the dollar after a U.S. federal court blocked a key move linked to a major reciprocal tariff order from Donald Trump’s presidency. The decision has revived hopes of easing global trade tensions, lifting demand for the greenback.

Crude Prices Rise, Industrial Output Slows

The rupee faced downward pressure from rising crude oil prices. Brent crude futures climbed 1.11% to USD 65.62 per barrel, adding to concerns over India’s import bill and inflationary pressures.

India’s industrial production growth decelerated to 2.7% in April 2025 on the domestic front. This is hugely impacted by sluggish performance in manufacturing, mining, and power sectors. The weaker data added to the rupee’s vulnerability.

Equities and FII Inflows Provide Partial Support

Despite these challenges, the rupee’s decline was limited by ongoing foreign fund inflows and robust performance in domestic equities. Foreign Institutional Investors (FIIs) were net buyers on Wednesday, investing Rs 4,662.92 crore in Indian stocks.

The equity market reflected this bullish sentiment, with the BSE Sensex rising 350.27 points (0.43%) to 81,662.59 and the NSE Nifty gaining 94.05 points (0.38%) to settle at 24,846.50.

Forex traders noted that while short-term pressure remains on the rupee due to external and macroeconomic factors, sustained FII inflows and equity market resilience are providing some cushion.

Disclaimer: This content is only for informational purpose. It does not make any recommendation to act or invest. Please read the offer documents carefully before investing. Investments are subject to market risks and other risks. There is no guarantee of the actual returns that will be given.