The rupee slumped 5 per cent in 2025 as persistent capital outflows from foreign investors, alongside heightened dollar demand from importers, making it one of the worst-performing Asian currencies.
The rupee plunged 38 paise to close at an all-time low of 90.32 against the US dollar on Thursday amid uncertainty over the India-US trade deal. Forex traders said the rupee is expected to trade with a negative bias as the delay in the trade deal between India and the US may continue to dent investor confidence.
A potential risk to the rupee's appreciation trajectory lies in the event of a delay in the Federal Reserve's rate cut cycle, particularly if core inflation in the US remains elevated.
The rupee on Thursday closed at its all-time low of 78.32 (provisional) against the US dollar as strong American currency and persistent foreign fund outflows weighed on investor sentiments. At the interbank foreign exchange market, the local currency opened at 78.26 and finally settled at its all-time low 78.32, unchanged from its previous close. On Wednesday, the rupee declined by 19 paise to settle at an all-time low level of 78.32 against the US dollar.
The rupee slipped by 4 paise to close at 77.59 (provisional) against the US dollar on Tuesday, weighed down by a negative trend in domestic equities and unabated foreign fund outflows. At the interbank foreign exchange market, the rupee opened lower at 77.56 against the greenback, and finally settled at 77.59, down 4 paise over its previous close. During the trading session, the rupee touched an intra-day low of 77.67 and a high of 77.51.
The rupee rose by 12 paise to close at 79.78 against the US dollar on Monday due to a weak dollar in overseas markets and an improved appetite for riskier assets. Stronger regional currencies also supported the rupee sentiment ahead of the US Fed policy decision on Wednesday. Weak domestic equities and FII outflows, however, capped sharp gains. At the inter-bank forex market, the local unit opened at 79.86 against the greenback and moved in a range of 79.70 to 79.87 in the day trade.
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The bank says the rupee can reach 57-58 levels though the RBI may try to stem the volatility by starting to build reserves at 60.
The rupee plunged 90 paise to close at an all-time low of 80.86 (provisional) against the US dollar on Thursday after the US Federal Reserve's interest rate hike and its hawkish stance weighed on investor sentiments. Forex traders said the US Fed's rate hike and escalation of geopolitical risk in Ukraine sapped risk appetite. Moreover, the strength of the American currency in the overseas market, a muted trend in domestic equities, risk-off mood and firm crude oil prices weighed on the rupee.
It does feel like we are close to the end of the rupee's rally, says Jamal Mecklai.
The dollar's preliminary moves after the low 80.90 are supportive of a like dollar rally back to 85.50. We should see confirmation of that in the early part of next week, says Sonali Ranade
Foreign institutional investors pulled out Rs 86.66 crore (Rs 866.6 million) from local stocks on Monday, as per provisional BSE data.
Don't catch falling knives or chase bear rallies no matter how enticing those eight pc green blips look. They may be mouse traps, warns Sonali Ranade
The rupee on Wednesday snapped its two days of losses and edged up two paise to end at 59.27 against the dollar following late selling of the US currency by exporters.
Textile and telecom shares have gained ahead of the Cabinet meet later today which is likely to announce new measures for both the sectors.
Ending a four-day upmove, the rupee on Tuesday retreated four paise from its 11-month high levels to close at 58.63 against the dollar on fresh demand for the US currency from importers, amid some profit-booking in stocks.
Markets finished the session on a dismal note with Sensex closing at its lowest level since August 2014.
A lot will depend on how the equity markets in the US play out in April-May this year. A correction there, long overdue, could change all the variables in the current equations, says Sonali Ranade
Time to take profits and move to the sidelines in an euphoria, says Sonali Ranade
'I can confidently say there will be another financial crisis soon enough, and probably more than one global crisis within the next century, given the increasingly integrated nature of the global economy.'
The dollar is king in an intermediate correction, says Sonali Ranade
Keep exit plans handy, D-day could be the second week of August, writes Sonali Ranade in Market Notes.
It was the RBI which destroyed our $-job economy. It is for the RBI to resurrect it by instituting news ways of managing the INR, says Sonali Ranade
Hoard cash. There will be plenty of time and opportunity at far lower levels, warns Sonali Ranade in her weekly Market Notes
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