Indian Rupee ends 5 paise stronger at 85.72/$, gains after one-day dip

The Indian rupee strengthened on Wednesday despite a slight rise in the dollar and crude oil prices weighing on the currency.

 

The domestic currency ended 5 paise stronger at 85.72 against the greenback after closing at 85.77 on Tuesday, according to Bloomberg data. The currency snapped its nine-consecutive day of gains on Tuesday, marking an end to the best winning streak since January 2024. 

 

The currency has appreciated by 2.2 per cent in March so far, tracking the fall in the dollar index. Meanwhile, during the current financial year, it witnessed about a 2 per cent fall. 

 

The rupee traded weak, pressured by a minor rally in the dollar index, according to Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities. Crude prices have also seen positive momentum, contributing to rupee weakness, while profit booking in capital markets has added further pressure, he noted. "Looking ahead, the rupee range is expected between 85.25-86.25, with global cues, crude movement, and capital flows influencing further direction."

 

 

The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.03 per cent at 104.21. The dollar index was weakened by 3.26 per cent in March, the highest since November 2022. 

 

With India’s liquidity deficit standing at ₹2.06 trillion and financial year-end tax outflows adding to the stress, the rupee could face renewed pressure, according to Amit Pabari, managing director of CR Forex Advisors. Additionally, geopolitical risks—from Israel’s offensive in Gaza to US airstrikes on Iran-backed Houthi rebels—are driving demand for safe-haven assets like the dollar, he said. 

 

Given the current market dynamics, the dollar-rupee pair is likely to find strong support around 85.40-85.50, with a potential rebound towards 86.50 levels in the short term, Pabari said. 

 

Foreign institutional investors remained net buyers of ₹5,371.57 crore from Indian equities on Monday. Global funds have pulled out ₹1.32 trillion from domestic stocks so far this year. 

 

Crude oil prices rose as US President Donald Trump threatened a 25 per cent tariff on countries purchasing oil and gas from Venezuela. Brent crude oil was up 0.59 per cent to $73.45 per barrel, while WTI crude was up 0.59 per cent at 69.41 per barrel as of 3:30 PM IST.