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The rupee pared its initial losses and settled for the day higher by 3 paise at 85.69 (provisional) against the U.S. dollar on Wednesday (March 26, 2025), supported by a resurgence of foreign fund inflows.
Forex dealers said the rupee faces renewed pressure on liquidity constraints, concerns over reciprocal tariff implementations and month-end demand for the U.S. currency from importers.
At the interbank foreign exchange, the rupee opened at 85.71 then touched an intraday high of 85.68 and a low of 85.98 against the greenback. The unit ended the session at 85.69 (provisional) against the dollar, registering a gain of 3 paise from its previous closing level.
On Tuesday (March 25, 2025), the rupee snapped its seven-session rally and settled with a loss of 11 paise at 85.72 against the U.S. dollar.
“The Indian rupee gained strength following a short pause on Tuesday (March 25, 2025), driven by a resurgence of foreign fund inflows. In addition, foreign banks and exporters played a key role by increasing the supply of dollars into the market,” Dilip Parmar – Senior Research Analyst, HDFC Securities, said.
However, trading volumes remained subdued as market participants made necessary adjustments ahead of the fiscal year-end, Parmar noted.
“Looking ahead, the USD-INR spot is likely to encounter support near the 85.40 level, while facing resistance around the 86.25 mark,” he added.
Forex traders said geopolitical risks — from Israel’s offensive in Gaza to U.S. air strikes on Iran-backed Houthi rebels — are driving demand for safe-haven assets like the U.S. dollar.
Meanwhile, U.S. President Donald Trump has threatened a 25% tariff on countries purchasing oil and gas from Venezuela. This has pushed Brent crude prices, they added.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03% higher at 104.21.
Brent crude, the global oil benchmark, rose 0.63% to $73.48 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex fell 728.69 points, or 0.93%, to settle at 77,288.50, while the Nifty declined 181.80 points, or 0.77%, to close at 23,486.85 points.
Foreign institutional investors (FIIs) purchased equities worth ₹5,371.57 crore on a net basis on Tuesday (March 25, 2025), according to exchange data.
Published – March 26, 2025 04:43 pm IST
