Rupee ended muted against US Dollar on Wednesday. It weakened by 6 paise to close at 86.89. The domestic currency opened stronger against the US dollar, appreciating by 39 paise to start at 86.44.
On Tuesday, the rupee had closed at 86.83, strengthening by 65 paise. It had previously opened at 87.35, recovering from a significant drop to 87.92 on Monday, due to new US tariffs on steel and aluminum imports. The US administration’s 25% tariff announcement had triggered a flight to safety, boosting the dollar.
The rupee closed at 86.8275, with an expected opening of 86.71. Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors LLP, predicted a trading range of 86.50 to 87.00 for the day. He advised exporters to sell near 87.50 and importers to wait for further dips to buy.
On Monday and Tuesday the Reserve Bank of India intervened to keep the rupee at 86.8275, after it peaked at 86.60. Bhansali noted that the rupee’s direction depends on RBI’s decisions—whether to appreciate, keep it range-bound, or depreciate by buying dollars.
The market is also watching the outcome of the trade tariff meeting between Prime Minister Modi and President Trump on Feb. 12 and 13.
Chief Economic Advisor V. Anantha Nageswaran, speaking at the IVCA Conclave 2025 on Tuesday, stated that the rupee’s depreciation has not hindered India’s ability to provide returns to investors. He noted that the rupee’s annual depreciation has historically been around 3%, and if India maintains an inflation rate of 3-4%, the decline might slow significantly. Nageswaran also pointed out that the rupee’s depreciation is a direct result of the dollar’s strength.
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