Indian Rupee Opens 19 Paise Stronger to ₹85.49

The Indian Rupee extended its winning streak for the fourth straight day on April 17, 2025, opening 19 paise (0.22%) stronger at ₹85.49 against the US Dollar, after closing at ₹85.68 the previous day. Over the last four sessions, the rupee has appreciated by nearly ₹1.2, significantly narrowing its monthly decline to just 0.06%.

Drivers Behind the Rupee’s Strengthening

The rupee’s sustained gains are primarily attributed to a combination of positive domestic economic data and a global shift in investor sentiment. According to Amit Pabari, Managing Director at CR Forex Advisors, the US’s recent measures aimed at slowing down China’s growth have indirectly made India a more attractive destination for foreign investors. This geopolitical recalibration has bolstered capital inflows into Indian markets, supporting the rupee.

Ben Powell, Chief Middle East, and APAC Investment Strategist at BlackRock also believes that Indian Government Bonds offer better yields relative to many major global economies. This makes Indian investments more attractive to foreign institutional investors (FIIs) who are looking for better profits, leading to steady inflows of foreign money into the country.

Robust Foreign Institutional Investor Activity

Foreign institutional investors ended a nine-day selling streak on April 15, snapping the trend by purchasing domestic equities worth ₹6,065.78 crore , the third-largest single-day buying spree this year. The positive momentum continued the next day, with FIIs investing an additional ₹3,936.4 crore in Indian equities on April 16. These strong inflows have played a crucial role in supporting the rupee’s appreciation.

Global Currency and Commodity Market Context

While the US Dollar Index, which measures the dollar’s strength against a basket of foreign currencies - inched up slightly by 0.13% to 99.50, it remains near its lowest levels since April 2022. Experts anticipate a short-term pullback of the dollar index to the 101.50–102 range, influenced by hawkish remarks from the Federal Reserve.

On the commodity front, crude oil prices rose for the second consecutive day amid US efforts to disrupt Iran’s supply chain. Brent crude increased by 1.17% to $66.62 per barrel, and WTI crude rose 1.44% to $63.37 per barrel as of early trading hours. Stable crude prices have helped ease inflationary concerns, indirectly supporting the rupee.

Outlook and Market Watch

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, expects the rupee to trade within a range of ₹85.40 to ₹85.80 in the near term, with the Reserve Bank of India (RBI) likely to intervene by purchasing dollars to prevent excessive appreciation of the domestic currency. 

Conclusion

The Indian Rupee’s four-day rally reflects a meeting of favorable domestic economic fundamentals, strong foreign institutional investor inflows, and a relatively weak US dollar. While global uncertainties remain, India’s attractive sovereign bond yields and geopolitical positioning continue to make it an attractive investment destination, providing sustained support to the rupee.

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