Rupee Falls 19 Paise to 86.59 Against Dollar as Equities Weaken, FII Outflows Continue

Mumbai, July 25, 2025 – The Indian rupee fell back by 19 paise to 86.59 against the US dollar in early trade on Friday due to weakness in domestic equities. It continued to be sold by foreign institutional investors (FIIs).

Forex traders advised that the local unit is trading in a range-bound manner while investors evaluate the latest global trade developments.

In the interbank foreign exchange market, the rupee opened at 86.59 per dollar compared to the previous close of 86.40. This indicates a decline towards the bottom range of the currency, amid cautious sentiment regarding global trade, which is causing persistent buying of the US Dollar.

Rupee Under Pressure Amid Global Trade Uncertainty

Currency markets remained stable as investors processed news about global trade. Ongoing uncertainty concerning the India-US trade deal has added to the rupee’s woes. A delay or failure to agree could cause difficulties for Indian exporters and further dampen the domestic currency’s performance.

On the other hand, a positive outcome will provide some near-term relief and improve forex market sentiment; however, until then, we expect participants to remain cautious.

US Dollar Strengthens; Brent Crude Rises

The US dollar index increased by 0.23% to 97.60, supported by several good economic data from the US, including the sixth consecutive weekly decline in jobless claims. This has strengthened the greenback globally, thereby exacerbating the rupee’s weakness.

Brent crude oil futures moved up 0.49% to USD 69.52 per barrel. The positive momentum from recent trade negotiations supported the prices. Rising crude oil prices traditionally put pressure on the Indian rupee due to higher import bills.

Domestic Markets Slump; FII Selling Continues

On Friday, Indian equity markets continued their decline. The BSE Sensex closed down 440.66 points, or 0.54%, to 81,743.51, while the NSE Nifty closed down 139.70 points, or 0.56%, to 24,922.40. The selloff primarily occurred due to profit booking across several key sectors and the prevailing selling momentum in the broader market.

As for the institutional part, overseas investors, or foreign institutional investors (FIIs) in India, continued their selling spree, resulting in a sale of Rs 2,133.69 crore on Thursday from Indian equities, according to exchange data. The continuous selling pressure has only weakened investor confidence at this point, while the rupee has also moved lower.

Rupee Outlook: Likely Range 86.10 to 86.60

Forex traders expect the rupee to remain under pressure in the near term, likely trading in the 86.10 to 86.60 range. Dollar demand from importers, global macro cues, and FII flows will continue to dictate the currency’s direction.

With ongoing global uncertainties and domestic market volatility, the rupee is expected to stay on a cautious footing.

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