Rupee plummets 51 paise to end at 87.23 against U.S. dollar

The rupee fell sharply by 51 paise to settle at 87.23 (provisional) against the U.S. dollar on Tuesday (February 25, 2025) due to month-end dollar demand by importers amid uncertainty over U.S. trade tariffs.

Elevated greenback against major crosses and sustained FII outflows also contributed to the decline in the domestic unit, forex traders said.

At the interbank foreign exchange, the rupee opened weak at 86.83 and kept losing ground through the day before settling at 87.23 (provisional), 51 paise lower than its previous close.

The local unit had settled at 86.72 on Monday.

"The rupee fell sharply against the U.S. dollar amid uncertainty over U.S. trade tariffs and demand from importers towards the end of the month. Covering of short positions due to the expiry of the futures contract, too, weighed on the rupee.

"We expect the rupee to trade negative on the back of overall weakness in the domestic markets and persistent FII outflows. Any recovery in the U.S. dollar may also weigh on the rupee. However, any intervention by the RBI and weakness in crude oil prices may support the rupee at lower levels," Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said.

Meanwhile, at the domestic equity markets, Sensex climbed 147.71 points to settle at 74,602.12 to end a five-session losing run. However, Nifty continued the downward streak, falling 5.80 points to 22,547.55.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.04% to 106.64.

"The dollar clawed back some losses after falling to its lowest in 2 months buoyed by safe-haven flows after the U.S. president said that tariffs on Mexico and Canada would go ahead as planned," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Brent crude, the global oil benchmark, declined 0.12% to 74.69 per barrel in futures trade.

Foreign institutional investors (FIIs) offloaded equities worth ₹6,286.70 crore on a net basis on Monday, according to exchange data.

USD/INR spot price is expected to trade in a range of ₹86.85 to ₹87.40, Mr. Choudhary said.