Currency Market News: Rupee weakens for fourth consecutive session, falls 45 paise to 86.71 vs US dollar
Rupee extended its losing streak for the fourth straight session on Wednesday, closing 45 paise lower at 86.71 (provisional) against the US dollar, amid heightened global tariff tensions. This decline came despite the Reserve Bank of India’s decision to reduce the key interest rate by 25 basis points to stimulate growth.
Forex traders noted that, although global crude oil prices fell sharply and the US dollar weakened, the Indian currency remained under pressure due to persistent foreign fund outflows and muted sentiment in domestic equity markets.
At the interbank foreign exchange market, the rupee opened at 86.52 and witnessed sharp volatility throughout the day, trading between a high of 86.47 and a low of 86.71 before settling at the day’s lowest point. This marks a sharp drop from Tuesday’s close of 86.26, when the rupee had slumped by 50 paise—its steepest single-day fall since January 13, when it dropped 66 paise.
In the two sessions prior, the rupee had declined 32 paise on Monday and 14 paise on Friday. Overall, the currency has depreciated by 104 paise against the US dollar over the past four trading sessions.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, attributed the rupee’s fall to weak global market sentiment due to escalating trade tensions between the US and China, following US President Donald Trump’s decision to impose an additional 50 per cent tariff on Chinese goods. “FII outflows and subdued domestic markets also weighed on the rupee,” he said. However, he added that falling crude oil prices and a weaker US dollar index helped limit the downside. “The USD-INR spot price is expected to trade in a range of 86.30 to 86.90,” he noted.
Despite the RBI’s 25-bps repo rate cut to 6 per cent—its second consecutive reduction aimed at spurring economic activity—the central bank also revised its GDP growth forecast for FY26 downward to 6.5 per cent, from 6.7 per cent earlier, citing global tariff-related uncertainties.
Speaking at a press conference after the monetary policy meeting, RBI Governor Sanjay Malhotra stated that the central bank does not target any specific exchange rate. “Our currency intervention is limited to addressing excessive or disruptive volatility. We do not aim to manage or maintain the rupee within a specific band or level,” Malhotra clarified.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.70 per cent at 101.98. Global oil benchmark Brent crude also dropped sharply by 3.82 per cent to a record low of USD 60.42 per barrel in futures trade.
Analysts observed that investor sentiment was further dampened by the latest round of US tariffs, including a hefty 104 per cent levy on Chinese imports, which took effect on Wednesday.
Stock market summary
Indian equity markets closed in the red on Wednesday (April 9, 2025), despite the RBI’s rate cut aligning with market expectations. The benchmark Nifty50 fell 0.61 per cent, or 136.7 points, to close at 22,399.15, while the BSE Sensex dropped 0.51 per cent, or 379.93 points, to settle at 73,847.15.
Broader markets also witnessed weakness, with the Nifty Smallcap 100 index underperforming and declining by 0.9 per cent.
On Monday, both Nifty and Sensex had plunged over 5 per cent during intraday trade before trimming losses to end nearly 3 per cent down. Foreign institutional investors (FIIs) continued to exit Indian equities, selling shares worth Rs 4,994.24 crore on a net basis on Tuesday, according to exchange data.
