Rupee Inches Higher to 88.72 vs. Dollar Before RBI Policy Decision

Mumbai, Sep 30, 2025 – The rupee started on a optimistic note on Tuesday, rising 3 paise to 88.72 against the US currency, buoyed by falling crude oil prices and steady domestic stocks markets. The local currency began the interbank trading at 88.73 and drifted higher to 88.72, against Monday’s close of 88.75. On Monday, the rupee fell 3 paise in a range-bound session.

Limited Gains Amid FII Outflows

Traders pointed out that a slightly firmer dollar and ongoing foreign institutional investor (FII) selling rounded off the rupee’s gains. FIIs sold Indian equities worth ₹2,831.59 crore on Monday, exchange data revealed. Market participants are also on guard ahead of the Reserve Bank of India’s (RBI) Monetary Policy Committee meeting on Wednesday, which comes in the backdrop of heightened geopolitical tensions and new US tariffs imposed on Indian exports.

Crude Oil and Dollar Flows

Brent crude futures traded 0.79% down at USD 67.43 per barrel, as higher crude supply from Kurdistan to Turkey was reported. Analysts pointed towards the expectations of an OPEC+ production increase in November and fears of a potential US government shutdown, which may dampen global crude demand. The dollar index, which monitors the greenback against a basket of six major currencies, rose 0.04% to 97.94, backing a slightly stronger dollar.

Domestic Equities Support

The rupee gains were further backed by a rebound in domestic equities. The Sensex rose 312.88 points to 80,677.82, and the Nifty jumped 96.90 points to 24,731.80 in early trade. Banking and PSU stocks played the key role in maintaining the positive mood, indicating investor optimism in anticipation of the RBI policy announcement.

US Tariffs on Indian Pharma

Trade issues of global nature continue to trouble the market, with the US declaring a 100% duty on branded or patented medicines exported from India, to come into force from October 1. But pharmaceutical firms with running manufacturing plans in the US, including under-construction facilities, would be exempted from the levy, offering some respite to large Indian pharma exporters.

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