Rupee Continues Slide Against US Dollar To Open 6 Paise Weaker

The Indian rupee opened weaker by 6 paise at 85.71 against the US dollar on Thursday, following a decline in the previous session.

Domestic currency weakened by four paise against the US dollar in the first trading session of 2025, closing at 85.65. Earlier in the day, the rupee opened at 85.62, reflecting continued volatility in the currency market.

This decline follows a weaker close on the final trading day of 2024, when the rupee dropped by 7 paise to 85.61. The rupee's ongoing weakness highlights the challenges it faces amid global dollar strength and local demand pressures.

Kunal Sodhani of Shinhan Bank noted that the first upside resistance for USD/INR stands at the all-time high of 85.81. A breakout above this level could push the currency pair towards the psychological 86.00 mark. On the downside, the 85.45 level, which has turned into support, may act as the first downside target.

In times of sharp depreciation, the Reserve Bank of India intervenes to sell foreign currency and protect the rupee, which can deplete the country's foreign exchange reserves. India's foreign exchange reserves fell by $60.50 billion to $644.39 billion in the week ending Dec. 20, 2024, down from a record high of $704.89 billion.

Meanwhile, Citi Research raised its target price for major Indian IT stocks, including Tata Consultancy Services Ltd., Infosys Ltd., and Wipro Ltd., reflecting the positive impact of the rupee's depreciation on their revenue from software exports.

The currency took nearly 14 months — from September 2023 to October 2024 — to weaken from 83 to 84 per dollar. However, it took only two months for the rupee to dip below the 85 mark. Still, the rupee remains firmly positioned among low-volatility currencies, ranking below the Chinese yuan, Malaysian ringgit, Indonesian rupiah, and Philippine peso suggests Bloomberg data.