The Indian rupee weakened by 16 paise to close at Rs 85.53 against the US dollar on Thursday, extending its fall for the third day, in comparison to its previous close of Rs 85.37 on Wednesday. This significant depreciation comes amid various global and domestic economic factors influencing the currency markets.
The domestic currency opened 14 paise weaker at Rs 85.51 against the US dollar. The slight recovery comes as the Reserve Bank of India said on Thursday that its balance sheet rose 8.2% year-on-year to Rs 76.25 lakh crore as of March 31.
Additionally, the Dollar Index briefly climbed to 100.50 after the release of the latest FOMC minutes, which struck a notably cautious tone.
The Fed emphasised a stance of strategic patience, reiterating that it is "well-positioned to wait for clarity" amid ongoing uncertainties related to inflation trends, labour market dynamics and geopolitical risks. This dampened the expectations of an imminent rate cut, offering near-term support to the greenback, said CR Forex Advisors.
It expects the dollar index to face resistance near the 101.50–102.00 zone, with immediate support at around 99.50.
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