The Indian rupee closed weaker against the US dollar on the final trading session of the week as it closed 18 paise lower at 85.45 against the US dollar, compared to its previous close of 85.27 per dollar on Thursday.
Intraday, the domestic currency depreciated by 39 paise to settle at 85.66 against the dollar, compared to Thursday's closing rate of 85.27.
Initially, the rupee opened with gains but soon came under pressure due to persistent dollar demand from importers for month-end payment obligations and rising cross-border tensions between India and Pakistan. Throughout the day, the rupee traded within a range of 85 to 85.66.
Anil Kumar Bhansali, executive director at Finrex Treasury Advisors LLP, advised exporters to hold off on selling and suggested that importers hedge their payables around the 85 level when possible.
He added that on Thursday, the Indian rupee had strengthened from 86.68 to 86.26, supported by inflows from the FPIs who bought shares worth Rs 8,000 crore and a corporate entity that maintained the rupee's strength throughout the day.
The US trade secretary's comments that India could be the first to sign a trade tariff treaty with the US also bolstered the rupee, he said.
Bhansali advised exporters to wait for better hedging opportunities, while importers were advised to consider near-term buying of dollars around the 85.00 level to hedge their imports. Bhansali also expected close monitoring of the RBI's dollar-buying activities near the 85.00 level.
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