Indian rupee loses steam after slipping under 85/$; opens 5 paise lower

Indian rupee opened weaker on Tuesday, a day after it fell under the 85 mark against the US dollar, buoyed by equity inflows by foreign portfolio investors and easing global tensions. 

 

The domestic currency opened 5 paise lower at 85.08 after ending at 85.03 against the greenback on Monday. The rupee appreciated to as much as 84.96 during Monday's trade to close at its highest closing since December 20, 2024.

 

With two sessions remaining in this month, the currency is on track to end April with gains of 0.45 per cent. The strength in the currency is underpinned by robust FII inflows, stronger domestic data, and easing global tensions, reflecting India's resilience amidst global volatility, according to Amit Pabari, managing director at CR Forex Advisors.  

 

India’s industrial activity continued its recovery momentum with the Index of Industrial Production (IIP) growing 3 per cent year-on-year in March 2025, a recovery from the six-month low of 2.9 per cent recorded in February. This positive sentiment was further fueled by a strong rally in equities, which rose by more than 1 per cent, driven by a surge in FII flows, Pabari added. FIIs bought stocks worth ₹2,474.1 on Monday, taking the nine-day purchase to ₹34974.1 crore. 

 

On the global front, US Treasury Secretary Scott Bessent told CNBC that the government is in contact with China but added that Beijing might have to take the first step in de-escalation. The Treasury secretary also said that the Trump administration is working with 15 to 17 countries to work out their trade deal. 

 

Meanwhile, the dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.17  per cent at 99.17, as of 9:10 AM IST. "Looking ahead, the rupee is likely to find support near 85.00 and resistance around 85.50; a breach on either side could pave a strong move on that side," Pabari said.  

 

The range for today is expected to be between 84.90 to 85.60, with expectations that the Reserve Bank of India could buy dollars at 85 levels while others sell, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "Markets will be keeping a close watch on the India-Pakistan borders as well as the RBI."

 

Crude oil extended its decline on Tuesday as concerns lingered over the health of the US economy, fueled by the trade war. Brent crude oil was down 0.64 per cent to $65.44 per barrel, while WTI crude was down 0.56 per cent at 61.70 per barrel as of 9:15 AM IST.