Rupee rises 10 paise to close at 87.78 against US dollar

The Indian rupee strengthened by 10 paise to settle at 87.78 (provisional) against the US dollar on Friday, buoyed by optimism over India-US trade talks and a dip in global crude oil prices.

However, every time the US “sneezes,” India seems to catch a cold. This year, the rupee has hit record lows due to US trade tensions. In May, the rupee was trading at 85, and now at 87, it remains one of the weakest among Asian currencies.

At the interbank foreign exchange, the rupee opened at 87.78 and moved between 87.63 and 87.85 before closing at 87.78, up 10 paise from Thursday’s 87.88.

“The rupee traded on a positive note of optimism over the India-US trade deal. We expect the currency to maintain a positive bias amid rising risk appetite and potential FDI inflows. Easing geopolitical tensions may also support the rupee,” said Anuj Choudhary, Research Analyst, Currency and Commodities, Mirae Asset ShareKhan. He cautioned, however, that investors remain wary ahead of US inflation data and the possibility of further trade measures. USD/INR is expected to trade in the 87.45-88.10 range.

The currency has also been influenced by other factors - more than ₹1 trillion has been withdrawn from Indian markets in recent months, and gold imports continue to affect foreign exchange reserves. Experts warn that if Washington imposes new sanctions on India, similar to those seen with other countries, it could exert further pressure on the rupee.

Meanwhile, the dollar index, measuring the greenback against six major currencies, rose 0.10 per cent to 99.03. Brent crude slipped 0.11 per cent to USD 65.92 per barrel in futures trade.

Domestic equity markets were subdued, with the Sensex falling 344.52 points to 84,211.88 and the Nifty down 96.25 points to 25,795.15. Foreign Institutional Investors sold equities worth ₹1,165.94 crore on Thursday.