Indian Rupee ends higher at 85.40/$ as dollar slips after Moody's downgrade

The Indian Rupee closed stronger against the dollar on Monday as the greenback faced renewed pressure after Moody's ratings downgraded the US debt. 

 

The domestic currency ended 12 paise higher at 85.40 after closing at 85.52 against the greenback on Friday, according to Bloomberg data. 

 

Moody's downgraded the US rating from a top-tier rating of AAA to AA1, citing concerns over the ballooning debt that could worsen under President Donald Trump's tax cuts. However, Treasury Secretary Scott Bessent said in an interview that "Moody’s is a lagging indicator — that’s what everyone thinks of credit agencies," downplaying any debt concerns. 

 

 

Markets could interpret the downgrade as a red flag for fiscal irresponsibility, potentially putting downward pressure on the dollar, according to Amit Pabari, managing director at CR Forex Advisors. The dollar Index, which measures the greenback against a basket of six major currencies, was trading 0.90 per cent lower at 100.18.  

 

  Asian equities edged lower alongside the dollar and US futures contracts after Moody’s Ratings slashed the US government's credit rating.

 

If the dollar dips further due to concerns from the US credit rating downgrade, the rupee could see some upside, Pabari said. 

 

Further, a strong wave of foreign inflows into Indian equity markets indicates renewed optimism about India’s macroeconomic stability, he said. "This uptick in investor sentiment provided much-needed support to the rupee amid a volatile global backdrop." 

 

The rupee has held its ground against the US dollar in the 2025 calendar year so far, but depreciated significantly against the euro and pound. It fell by 6.83 per cent, and 5.44 per cent against the euro and pound, respectively, as the two currencies strengthened significantly against the greenback during the period. READ MORE

 

Crude oil prices continued to trade lower amid talks to end the Ukraine war. Brent crude price was down 0.70 per cent to $64.95 per barrel, while WTI crude prices were lower by 0.74 per cent at 62.03, as of 3:35 PM.