Mumbai: The rupee traded in a narrow range and depreciated 3 paise to 86.65 against the US dollar in early trade Friday, ahead of the release of Economic Survey 2024-25.
Finance Minister Nirmala Sitharaman will table the Economic Survey 2024-25 Friday, providing an official assessment of the performance of the economy in the ongoing financial year, and listing out the challenges being faced by the nation.
Forex traders said the rupee continued to face pressure due to sustained foreign fund outflows and the broad strength of the American currency in the overseas markets due to unabated dollar demand from oil importers and weak risk appetite.
At the interbank foreign exchange, the rupee opened at 86.63 then fell further to 86.65 against the American currency, registering a decline of 3 paise over its previous close.
Thursday, the rupee depreciated 7 paise to close at 86.62 against the US dollar.
The Indian rupee continues to struggle, hovering near its all-time low, weighed down by multiple headwinds. Significant foreign fund outflows, expectations of monetary easing by the Reserve Bank of India, and lingering uncertainty over US President Donald Trump’s trade tariffs have all contributed to the pressure, CR Forex Advisors MD – Amit Pabari said.
Adding to the turbulence, the European Central Bank’s 25-basis-point rate cut has bolstered the US dollar index.
Moreover, the upcoming Union Budget 2025 is set to be a pivotal moment for the Indian economy.
“Increased government spending could raise the rupee supply, leading to depreciation. Conversely, strategic investments and policy reforms might attract FII inflows, lending support to the currency. The budget’s impact on capital flows and fiscal discipline will be key in determining the rupee’s fate,” Pabari added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 108.20, higher by 0.37 per cent.
Brent crude, the global oil benchmark, was quoted 0.83 per cent higher at USD 77.51 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex was trading 192.97 points or 0.25 per cent up at 76,952.78 in morning trade, while Nifty was higher by 72.70 points or 0.31 per cent to 23,322.20.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,582.95 crore in the capital markets on a net basis Thursday, according to exchange data.
PTI
