Rupee Slips 15 paise to ₹85.75 Amid Foreign Outflows and Firm Crude Prices

The rupee continued its downward trajectory on Tuesday, opening at ₹85.75 against the US dollar, weakening 15 paise from the previous close of ₹85.60. This marked the second consecutive session of losses for the domestic currency, as persistent foreign fund outflows and higher global crude oil prices weighed on investor sentiment.

Market participants cited increased dollar demand from oil importers and concerns over external account pressures as key drivers behind the rupee’s decline. The Indian unit traded in a narrow range during early deals but showed signs of pressure from overseas equity outflows.

Foreign Outflows and Crude Impact

Traders attributed the rupee’s weakness primarily to foreign institutional investor (FII) outflows ahead of key economic events and policy cues globally. The sustained rise in crude oil prices further exacerbated concerns, as India remains a major importer of energy. Brent crude hovered near the $65.37 per barrel mark, keeping upward pressure on the dollar demand from oil companies.

Outflows from Indian equities and debt markets have intensified ahead of major central bank decisions, particularly from the US Federal Reserve, which is expected to clarify its rate outlook in the coming weeks. Uncertainty around global interest rates has made emerging market currencies more vulnerable, including the rupee.

Broader Market Sentiment

The rupee’s performance mirrored broader market cautiousness, with traders closely tracking geopolitical developments and risk-off sentiment in global equities. While the dollar index weakened marginally, reflecting mixed data from the US economy, the rupee failed to gain as domestic macro fundamentals remained under pressure.

Moreover, the Reserve Bank of India (RBI) has so far refrained from significant intervention, allowing the rupee to adjust gradually in line with market forces. Analysts noted that the central bank’s measured approach is aimed at maintaining currency stability without depleting reserves.

Near-Term Outlook

Currency experts suggest that the rupee may remain under pressure in the near term, particularly if crude prices remain firm and foreign outflows persist. The ₹85.80–₹86.00 range is being closely watched as a technical resistance zone, with any breach potentially leading to fresh weakness.

The outlook will also hinge on domestic data releases, including GDP growth figures, inflation trends, and trade numbers. Any upside surprise in macro indicators could offer limited relief to the rupee, although global cues are likely to dominate in the immediate future.

Conclusion

With persistent capital outflows and rising oil prices, the rupee opened lower for the second straight session on Tuesday, reflecting a cautious investor stance and external headwinds. While short-term volatility may continue, market participants will watch for any signs of intervention or reversal in global risk sentiment to gauge the currency’s next move.

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