Rupee shrugs off oil surge amid trade deal optimism; ends at 88.85/$

Indian Rupee today: The domestic currency closed eight paise higher at 88.85 against the greenback on Thursday

The Indian Rupee advanced on Thursday as optimism over a potential US-India trade deal outweighed concerns over rising crude oil prices. 

 

The domestic currency closed eight paise higher at 88.85 against the greenback on Thursday, according to Bloomberg. The currency fell 2.61 per cent so far this year. The currency remained under pressure during Samvat 2081, depreciating by 4.36 per cent against the dollar in the period. The domestic unit hit multiple record lows during the year due to foreign outflows.

 

India and the US are likely to close the trade deal soon, in which the tariffs for Indian exports could be slashed to 15-16 per cent from 50 per cent, according to reports. 

Rupee saw a positive move as optimism around a potential US tariff deal provided support to the domestic currency, Jateen Trivedi, VP Research Analyst - commodity and currency, LKP Securities, said. "This week’s key event will be the US CPI data, which could influence dollar movement and, in turn, rupee volatility. The rupee now holds strong support at 87.65, while resistance is seen near 88.1."

 

 

Market sentiment remains cautious, with traders monitoring global cues, US economic data, and Reserve Bank of India (RBI) signals, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said.

 

Crude oil prices rose to the highest level in two weeks amid renewed geopolitical tensions and US sanctions targeting the US oil firms, analysts said. Brent crude price was up 5.38 per cent at 65.96 per barrel, while WTI crude prices were higher by 5.59 per cent at 61.77  per barrel, as of 3:40 PM IST.  

 

Meanwhile, the RBI did not purchase dollars for the second consecutive month amid pressure on the rupee. The Reserve Bank of India (RBI) sold $7.6 billion in August, compared with $2.5 billion in July. 

 

As of September 2025, the real effective exchange rate (REER) of the Indian rupee fell further to 97.6, from 98.8 in August. REER adjusts the nominal effective exchange rate to account for inflation differentials between India and its major trading partners.

 

The dollar index edged higher while the US 10-year bond yield was lower on Thursday, driven by safe haven flows and anticipation of the delayed US September CPI data. The measure of the greenback against a basket of six major currencies was up 0.17 per cent at 99.06.