The Indian rupee continued its downward trajectory against the US dollar in early trade, slipping 10 paise to reach 95.55 against the greenback. The decline reflects a confluence of persistent global supply chain disruptions in crude oil and accelerated capital outflows from foreign institutional investors (FIIs).
At the interbank foreign exchange, the local unit opened at 95.54 before weakening further to touch 95.55. The fresh dip follows Thursday’s trade, where the currency managed to pare early gains, ultimately settling down by 1 paise at 95.45.
Key Factors Behind the Slide
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Capital Flight: Foreign Institutional Investors (FIIs) remained net sellers in the domestic capital market, offloading equities worth ₹298.26 crore on Thursday alone, according to exchange data.
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Importer Demand: Commercial demand for the greenback—principally driven by oil marketing companies and month-end corporate settlements—kept sustained buying pressure on the US dollar.
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Oil Supply Chains: Ongoing logistical and geopolitical disruptions in international crude oil flows continue to weigh heavily on India’s import bill, adding structural headwinds to the currency.
Mitigating Drivers Capping Further Losses
Despite the pressure, forex analysts noted that a few global developments prevented a steeper depreciation:
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Easing Crude Prices: Benchmark Brent crude futures fell 0.48% in early trade to $89.27 per barrel, sliding back below the key $90 threshold.
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Muted Dollar Index: The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, remained soft at 99.14 (down 0.01%).
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Domestic Equity Support: The Indian equity market opened on a positive note, with the BSE Sensex climbing 245.56 points to 77,191.80 and the Nifty 50 gaining 54.20 points to reach 24,147.50.
Early Trade Market Summary
| Parameter | Level / Rate |
| USD/INR (Early Trade) | 95.55 (Down 10 paise) |
| USD/INR Opening Rate | 95.54 |
| Previous Close (Thursday) | 95.45 |
| Expected Range (Friday) | 95.40 – 95.60 |
| US Dollar Index (DXY) | 99.14 (-0.01%) |
| Brent Crude Oil | $89.27 / barrel (-0.48%) |
Market Outlook & Central Bank Stance
Treasury experts expect the Reserve Bank of India (RBI) to actively manage volatility around key resistance levels.
“The rupee is expected to trade within a narrow corridor of 95.40 to 95.60, with the RBI defending the upper boundary while importers and oil companies absorb liquidity on dips,” noted Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Currency markets globally remain in a holding pattern as traders await key monetary policy signals from US Federal Reserve Chair Kevin Warsh’s upcoming address at the Jackson Hole Economic Symposium.
