Indian Rupee Rebounds 7 Paise to Close at 88.28 Against Dollar

The Indian rupee made a modest recovery from its all-time low, closing higher by 7 paise at 88.28 against the US dollar on Friday. This rebound followed a period of weakness in the US dollar index and positive movements in domestic equity markets. Traders noted that the rupee fluctuated within a narrow range, influenced by factors including tariff pressures on exports and ongoing foreign fund outflows.

At the interbank foreign exchange market in Mumbai, the rupee opened at 88.39 and dipped to an intraday low of 88.42 before settling at 88.28, recovering 7 paise from its previous close of 88.35. This earlier close represented an all-time low for the currency, which had also reached an unprecedented intraday level of 88.49 against the dollar on Thursday.

According to Anuj Choudhary, a Research Analyst at Mirae Asset ShareKhan, the rupee is likely to trade with a slight positive bias due to the overall weakness in the US dollar and increased risk appetite in global markets. He pointed to rising expectations of a rate cut by the Federal Reserve in its upcoming Federal Open Market Committee meeting as a contributing factor.

Choudhary noted that while markets anticipate a potential rate cut of 75 basis points in 2025, foreign institutional investor (FII) outflows and uncertainties surrounding trade tariffs between India and the US may limit significant gains for the rupee. He indicated that traders should keep an eye on consumer sentiment data from the University of Michigan, as it could provide additional insights.

The USD-INR spot price is projected to range between 88 and 88.50 in the near term. In contrast, the dollar index, which measures the strength of the US currency against a basket of six others, rose by 0.22 percent to 97.74.

Additionally, the global oil benchmark, Brent crude, was trading 0.65 percent higher at USD 66.80 per barrel in futures trading. On the equity front, the Sensex surged by 355.97 points to close at 81,904.70, while the Nifty gained 108.50 points to finish at 25,114.

Despite these positive developments, foreign institutional investors sold equities worth Rs 3,472.37 crore on Thursday, according to exchange data. In a related context, Piyush Goyal, India’s Commerce and Industry Minister, stated that negotiations between India and the US regarding a proposed trade agreement have progressed positively since discussions began in March.

These comments followed a statement from former US President Donald Trump, who expressed optimism about the trade talks, indicating that there would be “no difficulty” in reaching a successful conclusion. Trump also mentioned looking forward to engaging with India’s Prime Minister Narendra Modi in the coming weeks.

As the situation unfolds, market participants will continue to monitor both domestic and international economic indicators that could influence the trajectory of the Indian rupee.