Rupee falls to 86.76 against US dollar on FII outflows

The rupee weakened by 5 paise to 86.76 against the US dollar in early trade on Monday (February 17). Heavy foreign fund outflows and weak domestic equities dragged it lower.

Forex traders noted that foreign banks aggressively bought dollars. Importers also rushed to secure dollars, fearing further depreciation amid global uncertainty.

On Friday (February 14), the rupee had gained 21 paise to close at 86.71 against the dollar.

Meanwhile, the dollar index, which measures the greenback against six currencies, slipped 0.02% to 106.68.

“Despite a sharp drop in the dollar index, the rupee stayed range-bound between 86.60 and 86.90. This suggests RBI is actively managing both sides—buying at lower levels and selling forwards at higher levels to stabilize excessive depreciation,” said Amit Pabari, MD, CR Forex Advisors.

Foreign institutional investors (FIIs) sold equities worth ₹4,294.69 crore on Friday, according to exchange data.

Pabari added that sustained FII outflows continue to pressure the rupee.

“The RBI’s move to double its government securities purchase target to $4.61 billion could impact liquidity and influence the rupee’s path. Also, potential tariff tensions from the Trump administration remain a key risk factor,” he said.

India’s forex reserves rose by $7.654 billion to $638.261 billion in the week ended February 7, RBI data showed. This marks the third straight week of gains.

The reserves had increased by $1.05 billion to $630.607 billion in the previous week.

–With PTI inputs