Rupee Gains Ground Amid Easing Inflation and Global Tailwinds, appreciates 21 paise to ₹85.13

The Indian rupee opened 21 paise stronger at ₹85.13 against the US dollar on Wednesday, buoyed by favourable domestic economic indicators and supportive global cues. This marks a notable recovery from the previous close of ₹85.34.

Domestic Factors Bolster Currency Strength

A significant contributor to the rupee's appreciation is the decline in India's retail inflation, which fell to 3.16% in April 2025, the lowest since July 2019. This decrease is largely attributed to a robust harvest that mitigated food prices, despite prevailing heatwave conditions. The subdued inflationary pressure provides the Reserve Bank of India (RBI) with potential leeway to consider rate cuts in its forthcoming monetary policy meetings, aiming to stimulate economic growth.

Global Developments Provide Additional Support

On the international front, the rupee's strength is further reinforced by a dip in crude oil prices and a weakening dollar index. Brent crude futures declined by 0.65% to $66.20 per barrel, while the dollar index eased by 0.07% to 100.93. These movements are partly due to the recent easing of trade tensions, with the US reducing tariffs on Chinese goods and China reciprocating by lowering levies on various imports.

Market Outlook

Despite the current gains, the rupee has experienced volatility, depreciating by 0.79% so far this month. While exporters might capitalise on the rupee's upticks, importers could find opportunities during dips, as the currency is expected to trade within a range of ₹84.25 to ₹86 in the near term.

The interplay of domestic economic resilience and global market dynamics will continue to influence the rupee's trajectory. Investors and market participants will closely monitor upcoming economic data releases and policy decisions for further direction.

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