Rupee Declines 10 Paise to 95.55 Against US Dollar in Early Trade Amid FII Outflows

The Indian rupee declined 10 paise to 95.55 against the US dollar in early trade on Friday, pressured by foreign institutional investor (FII) outflows and ongoing disruptions in global crude oil supplies.

At the interbank foreign exchange, the local unit opened at 95.54 against the greenback before slipping further to 95.55, down 10 paise from its previous close. On Thursday, the rupee had settled lower by 1 paise at 95.45 against the US dollar after paring initial gains.

Forex traders noted that a marginally weaker greenback and a fall in global crude oil prices below USD 90 per barrel prevented a sharper depreciation of the local currency.

The dollar index, which tracks the strength of the greenback against a basket of six currencies, was trading down 0.01 per cent at 99.14. Meanwhile, Brent crude—the global oil benchmark—traded lower by 0.48 per cent at USD 89.27 per barrel in futures trade.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, commented that the rupee is expected to remain in a narrow range of 95.40 to 95.60. He noted that the Reserve Bank of India (RBI) is likely to protect the upper end of the range, while the lower end faces buying pressure from oil importers and month-end demand.

Market participants are also keeping a close watch on upcoming macroeconomic cues, including the speech by US Fed Chair Kevin Warsh at the Jackson Hole Symposium.

On the domestic market front, equity indices traded in positive territory during early hours. The BSE Sensex rose 245.56 points to reach 77,191.80, while the NSE Nifty was up 54.20 points at 24,147.50.

Exchange data showed that foreign institutional investors offloaded equities worth Rs 298.26 crore on a net basis on Thursday.

"Currency fluctuations and foreign institutional outflows play a critical role in shaping the broader macroeconomic environment for businesses and startups operating in India. While domestic equities remain resilient in early trade, currency volatility driven by crude oil supply disruptions and global factors requires companies to carefully manage their foreign exchange exposure. Monitoring central bank interventions and global central banker statements remains essential for financial planning." — Dr. Shishir Gupta, Founder & CEO, StartupLanes