Indian Rupee Opens Flat at ₹85.13 After Five-Day Rally

The Indian rupee opened flat at ₹85.13 against the US dollar on April 22, 2025, pausing after a robust five-day rally that saw the currency reach its highest level in four months. The rupee’s recent strength has been underpinned by persistent dollar weakness, strong foreign inflows, and supportive domestic fundamentals.

Rupee’s Recent Performance: Rally Stalls at Four-Month High

Following a week of sustained gains, the rupee’s opening at ₹85.13 marks a pause in its upward momentum. Over the previous five sessions, the currency had appreciated steadily, buoyed by a weaker US dollar and robust foreign institutional investor (FII) inflows. FII’s have injected ₹14,670 crore into the Indian Cash Market during the past three trading sessions.The rupee’s rally brought it close to its best levels since December 2024, reflecting renewed investor confidence in Indian assets and the country’s resilient economic outlook.

Dollar Weakness and Global Factors

The rupee’s gains have closely tracked a broad-based decline in the US dollar, which has been pressured by expectations of a dovish Federal Reserve and softer US inflation data. As a result, emerging market currencies like the rupee have benefited from improved risk sentiment and capital inflows. Additionally, India’s limited exposure to global export shocks and a moderation in crude oil prices - thanks to higher OPEC+ output and global growth concerns, have provided further support to the rupee.

Domestic Fundamentals Remain Supportive

India’s macroeconomic backdrop remains favorable. Inflation fell to a five-year low of 3.34% in March 2025, well below the Reserve Bank of India’s (RBI) mid-point target of 4%. GDP growth for the last financial year stood at a solid 6.5%, reinforcing the central bank’s focus on supporting growth. These factors have encouraged foreign investment and limited outflows, even as the RBI maintains a cautious stance on interest rates.

Outlook: Cautious Optimism

While the rupee’s rally has paused, analysts expect the currency to remain relatively stable in the near term, supported by continued FII inflows, a soft dollar, and healthy domestic fundamentals. However, global uncertainties -such as potential shifts in US monetary policy and geopolitical developments could introduce volatility. Trading Economics forecasts the rupee to trade around ₹85.73 by the end of this quarter and ₹86.67 over the next 12 months.

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