Rupee Gains 10 Paise to Close at 85.26 Amid Weaker Dollar and Positive Economic Indicators
On Wednesday, May 14, 2025, the Indian rupee appreciated by 10 paise to close at 85.26 (provisional) against the U.S. dollar, recovering from earlier fluctuations. The recovery was primarily supported by upbeat domestic equity markets and encouraging macroeconomic indicators.
According to currency traders, the depreciation of the U.S. dollar in global markets, coupled with an increasing risk appetite driven by easing trade tariffs, played a key role in lifting market sentiment.
At the interbank foreign exchange market, the local currency began trading on a stronger note. Throughout the session, it fluctuated between an intra-day high of 85.05 and a low of 85.52 before settling at 85.26, marking a 10 paise gain from its last close. On the previous day (Tuesday, May 13, 2025), the rupee had erased early gains and ended flat at 85.36 against the greenback.
Dilip Parmar, Senior Research Analyst at HDFC Securities, stated:
“The rupee’s gains were underpinned by a declining U.S. dollar index, reduced import costs, and an overall positive market sentiment. These factors collectively supported the domestic currency on Wednesday.”
The U.S. dollar index, which tracks the dollar’s performance against a basket of six major currencies, was seen trading 0.64% lower at 100.35, reflecting the greenback’s weakness.
Additionally, Brent crude oil prices—a major factor influencing India’s trade balance—also eased. Brent fell by 1.10%, reaching $65.90 per barrel in futures trading.
Parmar further noted:
“Falling crude prices and a weaker dollar provided crucial support to the rupee. Technically, the USD-INR pair may find support around 84.90, while resistance is likely near the 85.70 mark in the short term.”
The domestic stock markets also mirrored this positive trend. The BSE Sensex climbed 182.34 points (0.22%), ending the day at 81,330.56, while the Nifty 50 index advanced 88.55 points (0.36%) to close at 24,666.90.
Despite the uptick in the markets, foreign institutional investors (FIIs) sold equities worth ₹476.86 crore on a net basis on May 13, according to exchange data.
On the economic front, India reported encouraging inflation figures. Retail inflation cooled to 3.16% in April, the lowest level in nearly six years, which may prompt the Reserve Bank of India (RBI) to consider a rate cut during its next monetary policy review in June.
Similarly, wholesale price inflation (WPI) dipped to a 13-month low of 0.85% in April, driven by declining costs of food items, fuel, and manufactured goods—further strengthening the economic outlook.
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