The Indian rupee declined by 19 paise to 85.15 against the US dollar in early trade on Wednesday, weighed down by renewed geopolitical tensions and a stronger demand for the American currency.
Currency traders attributed the rupee’s fall to heightened tensions between India and Pakistan, which have triggered a broader risk-averse sentiment across financial markets.
Despite this pressure, inflows from foreign investors and a drop in international crude oil prices helped cushion the Indian currency’s losses. At the interbank foreign exchange market, the rupee opened at 85.15 per US dollar, a 19 paise drop from its previous close. On Tuesday, the Indian currency had appreciated by 27 paise to close at 84.96 against the US dollar.
“Looking ahead, the rupee is expected to find immediate support in the 84.90–85.00 range, with a slight upward bias, moving towards the 85.80–86.00 levels in the near term,” said Amit Pabari, Managing Director at CR Forex Advisors.
In light of rising tensions between India and Pakistan, the United States has appealed to both nations “not to escalate” the conflict. US Secretary of State Marco Rubio is set to speak with the foreign ministers of both countries. At a press briefing on Tuesday, US State Department Spokesperson Tammy Bruce said, “Washington is reaching out to both India and Pakistan ‘regarding the Kashmir situation’ and telling ‘them not to escalate the situation.’”
The US dollar index, which tracks the greenback’s strength against a basket of six major currencies, was trading 0.11 per cent higher at 99.34. Brent crude, the global oil benchmark, declined by 1.11 per cent to USD 63.54 per barrel in futures trade, easing pressure on India’s import bill.
In India’s equity markets, the 30-share BSE Sensex rose 165.90 points, or 0.21 per cent, to 80,454.28, while the broader Nifty index gained 51.30 points, or 0.21 per cent, to settle at 24,387.25.
According to exchange data, foreign institutional investors (FIIs) were net buyers on Tuesday, purchasing Indian equities worth ₹2,385.61 crore. Meanwhile, India and the United States are working on a provisional trade arrangement in goods, aiming to secure an “early mutual win” before finalising the first phase of a proposed bilateral trade agreement by the autumn of 2025.
India’s Ministry of Commerce stated on Tuesday that both governments have launched sector-level discussions, with further engagements planned from the end of May.
