Currency Market News: Rupee gains 11 paise to 85.93 vs US dollar despite strong headwinds

Published 1 month ago• 2 minute read

Rupee saw a modest gain in early trade on Tuesday, rising 11 paise to settle at 85.93 against the US dollar. This happened even as domestic markets opened weak, global crude prices surged, and the dollar strengthened—factors that usually drag the rupee down.

At the interbank foreign exchange market, the local currency opened at 85.96 against the dollar and gained further to 85.93, marking an 11 paise rise from Monday’s close of 86.04.

Experts say the Reserve Bank of India (RBI) is likely playing a stabilising role here."The oil prices are the main factor for the rupee as FPIs and oil companies snap up dollars to fund their respective outflows. Today's given range is 85.75 to 86.30 and all depends on how the war progresses and what the RBI does in the market," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors, as PTI reported. 

However, he added, the RBI has been actively selling dollars near the 86.20 mark to keep the rupee in check.

Meanwhile, global oil prices are climbing again. Brent crude rose 0.34 per cent to $73.48 per barrel in early trade. Prices had spiked to $74.04 after US President Donald Trump warned Iran amid rising tensions with Israel—keeping fears of supply disruptions alive.

Indian stock market opened in the red. The Sensex dropped over 127 points to 81,669.13, while Nifty slipped 55 points to 24,891.50. The dollar index, which measures the dollar against a basket of global currencies, was also up 0.17 per cent, signalling broader strength in the greenback.

Adding to economic concerns, India’s unemployment rate in May crept up to 5.6 per cent from 5.1 per cent in April, largely due to seasonal shifts, according to data released Monday.

India’s exports, which had seen two months of positive growth, fell again in May—down 2.17 per cent to $38.73 billion. Imports also dipped by 1.7 per cent to $60.61 billion. However, the good news: the trade deficit narrowed to $21.88 billion. Foreign investors also seemed cautious. FIIs pulled out Rs 2,539.42 crore from Indian equities on Monday, according to exchange data.