The Indian rupee closed 7 paise lower at 95.96 against the U.S. dollar on Friday. While strong dollar index levels and high crude oil prices pressured the currency, foreign investor buying in Indian equities helped limit the decline.
The Indian rupee closed lower on Friday, losing 7 paise to settle at 95.96 against the U.S. dollar. The currency had started the day on a positive note, opening at 95.75 and briefly touching an intraday high of 95.71, but it could not maintain this momentum. By the end of the trading session, the rupee had surrendered its early gains to settle at its day's low.
Pressure on the rupee came primarily from external factors. The U.S. dollar index, which tracks the greenback's performance against a basket of global currencies, rose 0.24% to reach 100.39. A stronger dollar makes other currencies, including the rupee, relatively weaker. Furthermore, elevated crude oil prices remain a significant challenge for the Indian economy. Brent crude traded around $104.60 per barrel during the session. As India is a major importer of oil, higher prices mean the country needs more dollars to cover energy costs, which creates structural downward pressure on the domestic currency.
Despite these headwinds, the rupee found some support from activity in domestic stock markets. Foreign institutional investors (FIIs) remained active, recording net purchases of ₹599.54 crore in Indian equities. These inflows provided a cushion, preventing a sharper depreciation. The domestic market performance was mixed, with the Nifty 50 index closing with a gain of 75.80 points at 23,346.40, while the Sensex saw a slight decline of 19.63 points to close at 74,294.96.
Looking ahead, market participants are focused on global economic indicators. The upcoming U.S. industrial production data is the next key update for traders, as this information often influences expectations regarding U.S. interest rates. Any shift in those expectations can move the dollar index, which in turn impacts the rupee. Investors will also continue to monitor crude oil prices and foreign capital flow trends, as these two factors are likely to dictate the near-term direction of the currency.