Indian Rupee Opens 20 Paise Stronger at ₹85.71 Amid Global Trade Tensions

The Indian rupee opened 20 paise stronger at ₹85.71 per US dollar on Friday, March 28, 2025, compared to its previous close of ₹85.91. Despite ongoing global trade tensions and geopolitical uncertainties, the rupee showed resilience, supported by favorable domestic factors and cautious optimism in the forex market.

Key Drivers Behind the Rupee’s Movement

Dollar Weakness: The dollar index, which weighs the greenback against a basket of six major currencies, hovered around 103.95, giving track for emerging market currencies including the rupee to firm. The dollar’s recent weakness comes as US President Donald Trump’s threat to impose a 25% tariff on automobile imports stokes fears of a global trade war.

FIIs (Foreign Institutional Inflows): Foreign Institutional Investors (FIIs) remained net buyers for several recent sessions, supporting Indian equities despite global headwinds. This inflow has supported the rupee strongly, to a great extent offsetting external pressure.

Crude Oil Prices Stabilize: Brent crude oil is at $73.89 per barrel (+0.09%) and WTI crude oil is at $69.77 per barrel (+0.17%), showing rather low volatility. Steady crude offers relief on worries about India’s import bill, adding to currency support.

Year-End Adjustments: The spot rates were aligned because of year-end high premiums and a declining risk appetite among traders, which affected the rupee direction.

Market Sentiment

In the short term, forex analysts maintain a cautious optimism on the rupee. “The USD-INR pair should find resistance at ₹86.00 but is expected to stall and the ideal range expected to play out around ₹85.50 to ₹86.00 levels, with ₹85.40- ₹85.50 levels exhibiting solid support,” said Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors LLP.

Outlook for FY25

The rupee is still on track for a projected decline of around 2.5% for FY25, even after today’s gains, largely owing to external headwinds such as rising US interest rates and geopolitical risks batting zero-sum global trade flows.

Conclusion

Most encouragingly, the Indian rupee opened today in the positive; a testament to resilience in the face of difficult global circumstances. Although support from domestic factors such as foreign inflows and stable crude oil prices has been forthcoming, outside uncertainties continue to threaten its long-term growth path.

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