Rupee falls 8 paise to 86.87 against U.S. dollar

The rupee failed to sustain its recovery and depreciated 8 paise to close at 86.87 (provisional) against the U.S. dollar on Wednesday (February 12, 2025) due to a firm American currency and an unending outflow of foreign funds.

According to forex traders, rupee stayed firm initially but lost grounds amid volatile domestic equity markets that also added to the trend of withdrawal by foreign institutional investors.

They said the easing crude oil prices supported the Indian currency at lower level but at the same time the currency markets saw muted participation awaiting cues from the inflation and industrial output data to be released by the government.

At the interbank foreign exchange, the rupee opened at 86.44 and moved between the high of 86.36 and the low of 86.91 against the greenback during intra-day. The unit ended the session at 86.87 (provisional) against the dollar, registering a fall of 8 paise from its previous close.

On Tuesday (February 11, 2025), the rupee appreciated 66 paise, logging the maximum single-day gain since March 3, 2023, to close at 86.79 against the U.S. dollar.

The steep surge came a day after the unit plunged to near 88 per U.S. dollar-level during intra-day on Monday (February 10, 2025), though the currency ended the session with gains at 87.45 against the greenback.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee rallied in early trades on intervention by the Reserve Bank of India. However, it lost gains on a weak tone in the domestic markets and a recovery in the U.S. dollar index.

Mr. Choudhary said the rupee is expected to trade with a negative bias amid weakness in the domestic equities and persistent FII outflows. “Traders may take cues from inflation data from the U.S. and India. USD-INR spot price is expected to trade in a range of ₹86.50 to ₹87.30.”

Meanwhile, the U.S. dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04% higher at 107.87.

The elevated level of dollar index was attributed to escalating trade tensions after the U.S. imposed 25% tariffs on aluminium and steel imports into the country.

Brent crude, the global oil benchmark, dropped 0.92% to $76.29 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex declined 122.52 points, or 0.16%, to settle at 76,171.08, while the Nifty fell 26.55 points, or 0.12%, to 23,045.25 points.

Foreign institutional investors (FIIs) offloaded equities worth ₹4,486.41 crore in the capital markets on a net basis on Tuesday (February 11, 2025), according to exchange data.