Rupee gains in volatile trade after RBI's big cuts; ends higher at 85.64/$

Indian Rupee today: The domestic currency appreciated 16 paise to end at 85.64 against the greenback, after closing at 85.80 on Thursday

The Indian Rupee was hit by volatility but strengthened on Friday, after the Reserve Bank of India (RBI) unleashed a barrage of liquidity to boost economic growth amid a fragile global macroeconomic situation. 

 

The domestic currency appreciated 16 paise to end at 85.64 against the greenback, after closing at 85.80 on Thursday, according to Bloomberg. During the session, the currency witnessed high volatility, with the unit sliding to the 86 mark against the dollar. 

 

The RBI's monetary policy committee (MPC) cut the repo rate by 50 basis points to 5.50 per cent, marking the third consecutive reduction in 2025. The central bank also cut the cash reserve ratio (CRR) by 100 basis points to 3 per cent, which is likely to infuse ₹2.5 trillion in the system. Further, the RBI also shifted its monetary policy stance from 'accommodative' to 'neutral'. 

 

 

  Analysts at Nomura see limited support for the currency from a macro perspective due to continued downside growth challenges ahead, along with RBI rate cuts. "Overall, we still expect INR to underperform, and today’s actions and the policy/macro outlook do not change this view." 

 

With foreign portfolio investor (FPI) flows remaining uncertain and recent inflows being tepid and sporadic, the rupee has been on a weakening trend, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.

 

Meanwhile, the dollar index edged up as investors evaluated the phone call between US President Donald Trump and Chinese President Xi Jinping. The two leaders spoke on Thursday and agreed to resume trade talks through upcoming official-level meetings. The index, which measures the greenback against a basket of six major currencies, was up 0.24 per cent at 98.982.

 

The dollar was headed for a weekly loss on Friday, undermined by signs of fragility in the US economy, and as trade negotiations between Washington and its trading partners made little progress despite a looming deadline, Bhansali said.

 

Meanwhile, the friends-turned-foes episode deepened tensions as the US President Donald Trump threatened to end Elon Musk’s government contracts after his comment on the 'Big Beautiful Bill', sending Tesla shares to their worst in four years. 

 

In commodities, crude oil prices fell as investors remained on edge over slowing growth, although increased tensions between Russia and Ukraine limited losses. Brent crude price was down 0.26 per cent to $65.17 per barrel, while WTI crude prices were 0.32 per cent higher at 63.17, as of 3:40 PM IST.