The Indian rupee closed flat against the US dollar on Friday at 86.62. The domestic currency opened flat against the US dollar, starting at 86.63.
It had weakened by seven paise to close at 86.63 on Thursday, according to Bloomberg data.
The rupee's weakness comes amid ongoing global economic concerns and market volatility. Despite efforts by the Reserve Bank of India to support liquidity through special measures, including open market operations and forex market interventions, the currency remains under pressure due to external uncertainties. These measures are expected to infuse about Rs 1.5 lakh crore into the banking system, but the rupee continues to face challenges.
In the US, the fourth-quarter GDP growth slowed to 2.3%, missing the 2.6% forecast and falling from 3.1% in Q3. This lower-than-expected reading raised concerns about slowing economic momentum.
The Personal Consumption Expenditure price index rose to 2.3%, accelerating from 1.5% in the prior quarter, suggesting that inflation remains persistent despite the overall GDP slowdown. Core PCE, the Fed's preferred inflation measure, remained unchanged at 2.2%, missing expectations for 2.5%. This softer-than-expected inflation reading fuelled mixed reactions in the market, according to Kunal Sodhani of Shinhan Bank.
Exporters may sell small amounts near 86.65, while importers are advised to continue buying on dips, according to Anil Bhansali, executive director at Finrex Treasury Advisors LLP.
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