Rupee Gains 25 Paise to Close at 85.51 Against US Dollar Amid Weak Greenback, Firm Equities

Mumbai, July 1, 2025: The Indian rupee appreciated by 25 paise to close at 85.51 against the US dollar on Tuesday, supported by the weakness in the greenback overseas and a positive sentiment in domestic equities. A rise in global risk appetite also lent support to the local currency.

Dollar Slides to Multi-Year Low; Crude Remains Subdued

The US dollar slipped to its lowest level since February 2022, as concerns mounted over the Federal Reserve’s independence due to the rising influence of former President Donald Trump on the policy outlook. This weakness in the dollar improved sentiment for emerging market currencies.

In addition, Brent crude prices declined by 0.24 percent to USD 66.58 per barrel in futures trade. Lower oil prices helped ease inflationary pressures and offered relief to India’s import bill.

Rupee Range-Bound; Opens at 85.66, Hits High of 85.34

At the interbank foreign exchange market, the rupee opened at 85.66 and touched an intraday high of 85.34. It eventually settled at 85.51, marking a gain of 25 paise from the previous close of 85.76 on Monday, when it had weakened by 26 paise.

Dollar Index Weakens; Domestic Markets Stay Firm

The dollar index, which measures the strength of the greenback against a basket of six major currencies, declined 0.46 percent to 96.43, mirroring the overall downtrend in the US currency.

On the equities front, both key domestic indices advanced marginally. The Sensex rose 90.83 points to close at 83,697.29, while the Nifty gained 24.75 points to finish at 25,541.80.

FII Outflows Continue; Mixed Economic Indicators

Despite the uptick in the rupee and equities, foreign institutional investors (FIIs) remained net sellers, pulling out Rs 831.50 crore from Indian equities on Monday, as per exchange data.

On the macroeconomic front, India’s industrial production growth slowed to a nine-month low of 1.2 percent in May 2025, largely impacted by subdued performance in manufacturing, mining, and power sectors, attributed to the early onset of monsoon.

However, fiscal indicators showed strength. The central government’s fiscal deficit stood at 0.8 percent of the full-year target at the end of May, driven by a significant Rs 2.69 lakh crore dividend received from the Reserve Bank of India.

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