Rupee Drops To Nearly Two-Week Low, Closes Near 86 Against US Dollar
The Indian rupee opened 32 paise weaker at 85.91 against the US dollar on Wednesday, in comparison to its previous close of 85.59 on Tuesday. This sharp depreciation comes amid various global and domestic economic factors influencing the currency markets.
The domestic currency opened 16 paise weaker at 85.75 against the US dollar but weakened by 43 paise to 86.02 against US Dollar, the lowest level since May 23. "This spike was largely driven by equity outflows and squaring of offshore NDF (Non-Deliverable Forward) positions ahead of RBI MPC and NFP data," said Ritesh Bhanshali, director, Mecklai Financial Service Ltd.
He further added that the Rupee broke above the resistance level of 85.80. There was noticeable demand from foreign banks and oil companies adding to the upside pressure, he said.
Rupee had depreciated to 85.65 in the NDF market on Tuesday, the stronger dollar and renewed FII outflows from equity markets, which amounted to Rs 2,853.83 crore.
"However, RBI remains well-positioned to step in, with a comfortable reserve buffer of $693 billion, limiting the scope for any sharp rupee depreciation," said Amit Pabari, managing director at CR Forex Advisors.
He further added that robust domestic bond issuance are also supporting the rupee.
Additionally, the US dollar extended decline for the second day as the dollar index fell to 98.70 levels as ISM Manufacturing Imports Index crashed to 39.9 in May—a level not seen since 2009. Alongside, the Manufacturing PMI slipped further into contraction at 48.5, revealing a toxic mix of weak demand, falling output, and rising cost pressures.
On Wednesday, crude fell after rising for two consecutive session with Brent crude—the global benchmark for crude oil—fell 0.18% to $65.51 weighed by loosening supply and demand balance following increasing OPEC+ output and lingering concerns over the global economic outlook due to tariff concerns. Crude was up last week as OPEC+ boosted supply, in line with market expectations.
"Oil markets struggle to make major gains despite these disruptions," added Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
