Rupee Extends Losing Streak for Sixth Day, Closes at 86.41 Against US Dollar

Mumbai, July 23, 2025 – The Indian rupee weakened for the sixth consecutive session on Wednesday, settling 3 paise lower at 86.41 against the US dollar, weighed down by foreign fund outflows and a stronger greenback.

Dollar Strength and FIIs Pressure the Rupee

At the interbank foreign exchange market, the rupee opened weaker at 86.46 and touched an intraday high of 86.34. It eventually closed at 86.41, slipping 3 paise from Tuesday’s close of 86.38.

The domestic currency has now fallen consistently since July 16, when it lost 16 paise to settle at 85.92. The ongoing slide is attributed primarily to foreign institutional investor (FII) outflows and sustained strength in the US dollar.

According to exchange data, FIIs sold Indian equities worth Rs 3,548.92 crore on Tuesday, exerting further pressure on the currency.

Limited Relief from Oil and Equities

Despite the weakness, the rupee received some support from falling global crude prices and strong performance in domestic equity markets. Benchmark indices ended sharply higher with the Sensex climbing 539.83 points to 82,726.64 and the Nifty rising 159 points to 25,219.90.

Brent crude futures fell 0.52% to USD 68.23 per barrel, easing concerns on the import bill front for India, which is heavily reliant on oil imports.

Global Factors Add to Uncertainty

The US dollar index rose marginally by 0.04% to 97.16, supported by expectations of persistent inflation in the US, which dampened hopes for a near-term rate cut by the Federal Reserve.

Market participants are also closely watching the ongoing India-US trade negotiations. With an August 1 deadline approaching, any delay or setback in the discussions could raise trade-related risks for Indian exporters and potentially add to the rupee’s downside.

The two nations concluded the fifth round of bilateral trade talks in Washington last week, and the US delegation is scheduled to visit India in August for further discussions.

Outlook

Traders expect the USD-INR spot rate to remain volatile, with a possible trading range between 85.60 and 86.30 in the near term, influenced by upcoming US Producer Price Index (PPI) and industrial production data.

The rupee’s trajectory will likely hinge on the direction of FII flows, developments in global trade discussions, and the US economic data that could shape future Fed policy actions.

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