Mumbai (Economy India): The Indian rupee depreciated by 17 paise to settle at 85.97 per US dollar in early trade on Monday, amid a firm greenback overseas and continued foreign capital outflows.
According to forex traders, the rupee faced downward pressure due to the strengthening of the US dollar, triggered by investor concerns over global trade dynamics and the possibility of renewed US tariffs.
“The broader risk-off sentiment and foreign institutional investors (FIIs) withdrawing capital from domestic equities have weighed further on the Indian currency,” said a Mumbai-based currency dealer.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, remained firm near 107, reflecting market anticipation around upcoming US economic data and potential Federal Reserve moves.
On the domestic front, concerns around India’s current account deficit, coupled with geopolitical uncertainties, have also contributed to the rupee’s weakening trajectory.
Market experts suggest that if global risk sentiment remains cautious and capital outflows continue, the rupee may test new lows in the coming sessions. However, Reserve Bank of India’s potential intervention could offer temporary support.
Outlook:
Analysts advise keeping an eye on US inflation data, FII investment trends, and any official RBI action to gauge near-term rupee movement.
(Economy India)
